H. L. ANAND, J. -
(1.)These applications u/s 45-D of the Banking Regulations Act, 1949 by a Bank, in liquidation, against a joint stock company, in liquidation, and another joint stock company, which claims to be its creditor, are based on. disputes between the Bank, on the one hand, and the company in liquidation and its creditor on the other, as to the nature of the indebtedness of the company in liquidation to the Bank, the identity of the assets by which the debt purported to be secured, and raise some interesting questions with regard to limitation and certain provisions of the Banking Regulation Act.
(2.)Ideal Bank Ltd., now in liquidation, for short, the Bank, was carrying on the business of banking, inter alia, in Delhi. Pride of India Pictures Ltd. also in liquidation, for short the Company, respondent No. I, was a company carrying on business of exhibition of cinematographic films, inter alia, in Meerut and Hardoi. In the year 1946, the Company opened a cash credit account with the Bank in Delhi with a sanctioned limit of Rs. 1 lakh, against the security of its assets and by a written instrument of March 26, 1946, the company purportedly created a "pledge" of its various assets in favour of the Bank to secure the repayment of the outstanding in the account. Certain other documents are also said to have been executed to secure the repayment. Subsequently the company offered additional security of shares in Vanguard Insurance Company Ltd. The charge was apparently confirmed by the Insurance Company. In 1952, a sum of over Rs. I lakh was said to be outstanding in the account and on default in repayment, the Bank sought the winding up of the Company on the ground of its inability to pay. The petition was resisted on the ground that the debt was bona fids disputed. The plea of the company was turned down and the company was ordered to be wound up. In 1954, the Bank was also ordered to be wound up on its own petition and both have since been in liquidation.
(3.)It appears that sometime in September, 1950, the Company borrowed large sums of money from Adarsh Films Ltd., respondent No. 2, for short the creditor, against the mortgage of its assets, apparently, including some of the assets which had already been pledged with the Bank. The arrangement visualised that the creditor would run two cinemas of the company and would get possession of the cinemas, and other assets for a period of four years from the date of the mortgage or for such longer period as may be necessary to recover the outstandings. There is considerable dispute if the creditor rendered proper accounts to the company and as to the precise liability of the company and the status of the assets held by the creditor pursuant to the aforesaid arrangement. It, however, appears that at one stage in the year 1955, the District Judge, who was then dealing with the liquidation of the company, ordered an investigation with regard to the precise indebtedness of the company to the creditor but it proved abortive. In December, 1970, the Official Liquidator of the Company sought permission of the District Judge to enter into a compromise with the creditor ia terms of which all the assets of the company, held by the creditor and said to be of the value of Rs. 34,000 were to be set off, against the oatstanding of the creditor which were then claimed to be of the order of over Rs. 66,000. The compromise contained certain other provisions.