Shah, J. - (1.) The Oriental Bank of Commerce Ltd. was incorporated in February 1943 under the Indian Companies Act, 1913. The Bank had its registered office at Delhi and it opened branches in Lahore and in other towns which ever now in Pakistan, the capital of the Bank was divided into 5,97,584 ordinary shares of Rs. 10/- each, and 24,200 B class ordinary shares of Re. 1- each. The paid-up capital of the Bank as on December 31, 1946 was approximately Rs. 28 Lakhs. On account of disturbances which followed in the wake of the setting up of the Dominions of India and Pakistan, the Bank lost a substantial part of its assets in the territory now called West Pakistan and was unable to recall its advances. By 1950 the accumulated lasses of the Bank amounted to Rs 10,57,850/-
(2.) In December 1950 the Directors of the Bank made a call of Rs. 218 per share on its ordinary share-holders. They also resolved to reduce the capital of the Bank and for that purpose an extra-ordinary General Meeting of the Bank was convened on November 29, 1951 and special resolutions were passed reducing the issued and subscribed capital of the Bank to Rs. 4,56,137 ordinary shares of Rs. 5/- each and 24,200 B-class ordinary shares of annas 8 each. This reduction was to be effected by cancelling the paid-up capital to the extent of Rs. 5 on each ordinary share and annas 8 on each 'B' class ordinary share. Before the special resolution was passed the Parliament enacted the Displaced Persons (Debts Adjustment) Act, 70 of 1951. That Act defines 'displaced person by S. 2(10) as meaning "any person who on account of the setting up of the Dominions of India and Pakistan, or on account of civil disturbance or the fear of such disturbances in any area now forming part of West Pakistan, has, after the 1st day of March, 1947, left, or been displaced from, his place of residence in such area and who has been subsequently residing in India, and includes any person who is resident in any place now forming part of India and who for that reason is unable or has been rendered unable to manage, supervise or control any immovable property belonging to him in West Pakistan, xx x x ." Diverse provisions were made by the Act to ameliorate the condition of displace persons. The Act provided for adjustment of debts, secured and unsecured, relief from liability to pay calls on shares in companies, and enacted provision for revision of decrees and settlements, apportionment of join, debts, cessor of accrual of interest, exemption from arrest and attachment of property, scaling down of debts, and extension of the period of limitation in certain classes of actions. Power to set up Tribunals having authority to exercise jurisdiction under the Act was also conferred by the State Government.
(3.) Pursuant to the resolution passed by the Bank at an extra-ordinary General Meeting on November 29, 1951 and application was submitted before the District Judge, Delhi exercising powers of the Company Judge for an order under Ss. 55, 56 and -57 of the Indian Companies Act, 1913 for reduction of the share capital of the Bank. This application was opposed by two share-holders who contended that the Bank was merely trying to circumvent the provisions of the Displaced Persons (Debts Adjustment) Act, 70 of 1951 by resolving to reduce the capital. At the hearing of the application counsel for the Bank proposed that the Bank would accept, without any payment, surrender of ordinary share of Rs. 10/- each, on which Rs. 5/- had been paid up, by any person entitled to relief under S. 19 of the Displaced Personas (Debts Adjustment) Act, so as to relieve him from further liability to pay the call of Rs. 2/8per share made by the Bank and all future calls. This condition was accepted by the shareholders who appeared at the hearing. The Company Judge allowed the petition and confirmed the resolution reducing the share capital on the terms and conditions relating to surrender accepted by the Bank and directed that notice be given under S. 61 of the Indian Companies Act, offering to all persons intending to avail themselves of the option of surrender an opportunity to apply in that behalf to the Bank within two weeks of the publication of the notice.;