H NAIK OFFICIAL LIQUIDATOR PURI BANK LTD Vs. KANHU CHARAN DAS

JUDGEMENT

(1.) This is a reference by the Official Liquidator of Puri Bank (under liquidation) for a direction from this Court as to whether under Sections 18 and 19, Orissa Estates Abolition Act (Orissa Act 1 of 1952) he should file a claim on behalf of the Bank before the claims Officer for determination of the amount payable to the Bank out of the total compensation money due to the judgment-debtor whose estate has already vested in the State Government in accordance with the provisions of the said Act. The Advocate General appeared on behalf of the Government to oppose the reference. But none appeared on behalf of the judgment-debtor though notice was served on him.

(2.) The Puri Bank (which is now under liquidation) was the mortgagee of the proprietary interest of the judgment-debtor in village Barhat Trilochanpur. In M. S. No. 19 of 1951 filed by the Official Liquidator, this Court passed a preliminary mortgage decree on 8-2-1952 and made it final on the 20th January, 1953 and directed that the mortgaged property should be sold. The Official Liquidator then filed an execution proceeding on 5-11-1953. Before further action could be taken by this Court in the execution proceeding, the mortgaged property vested in the State Government on 22-1-1954 by virtue of a notification issued under Section 3 of the O. E. A. Act Doubtless, by virtue of Sub-section (2) of Section 73, T. P. Act the decree-holder would be entitled to claim payment of the mortgaged money out of the total amount due to the mortgagor as compensation. The main question for consideration is whether this Court exercising its jurisdiction over the liquidation proceedings of the bank by virtue of the powers conferred by Part IIIA of the Banking Companies Act, 1949 (as amended) has exclusive jurisdiction to determine and take steps for the realisation of the mortgage money or else whether the provisions of the O. E. A. Act would oust the jurisdiction of this Court.

(3.) At this stage I may briefly recapitulate the relevant provisions of the O. E. A. Act, 1951. As soon as a notification is issued under Section 3(1) of that Act the proprietary interest of an intermediary in an estate vests in the State Government and the only right that subsists in the property is the right to receive compensation as determined and apportioned under the provisions of that Act. A suit in a Civil Court is expressly barred by Sections 5(e) and 39 of that Act. Section 18 says that within six months from the date of vesting every creditor of the proprietor whose debt is secured by a mortgage may apply to a Claims Officer appointed under the Act for the purpose of determining the amount of debt legally and justly payable to him. Sections 19 and 20 contain procedural provisions in respect of the claim cases filed before that officer. Chapter V contains detailed provisions for the assessment of total compensation payable to the proprietor whose estate has been taken over under the Act; first by an officer known as the Compensation Officer and later on by a Tribunal constituted under the Act. It is unnecessary to describe in detail most of the provisions in that Chapter. But I may refer to Sub-section (3) of Section 28 in which it is specified that where the interest of a proprietor in an estate is subject to a mortgage the compensation payable to the mortgagee in satisfaction of his debt should not exceed a certain specified percentage of the total compensation as assessed under the provisions of that Chapter. Chapter VI deals with the manner of payment of compensation and Sub-section (3) of Section 37 says that the total compensation is payable in thirty annual equated instalments from the date of vesting; but the proviso to that sub-section confers discretion on the Government to pay the compensation in one lump sum.