Smt. Mahamaya Ojhain vs Laheriasarai Central Co-operative Bank Ltd.

Rowland, J.—This miscellaneous appeal and application in civil revision have been heard together.

The appellant who is also the applicant, was the plaintiff in a money suit. She had deposited Rs. 2500 with the defendant bank. The bank is a registered society under the Bihar and Orissa Cooperative Societies Act. She brought her suit on 10th August 1937 claiming the principal and interest and future interest. The claim at the date of suit was laid at Rupees 3494-9-6. Substantially, except for a trifling difference in the figures, the claim was admitted by the bank. During the pendency of the suit, the bank which had stopped payment proposed to the Registrar of Co-operative Societies an arrangement for composition with its creditors. A meeting of creditors was convened and held and a scheme was adopted which the Registrar approved on 1st June 1938. The amount of the appellant''s dues was settled at Rs. 3483 and the terms provided for deferred payment and reduced interest. The plaintiff however continued with her suit and obtained a decree on 23rd August 1938 for a sum of Rs. 3649 to carry future interest at 6 per cent.

On 14th September 1938 she commenced execution for the sum then due said to be Rs. 4183 and prayed the Court to bring to sale the bank''s buildings and certain furniture. The bank objected that in face of the composition effected under the Cooperative Societies Act, the decree was not executable and the lady must obtain satisfaction of her dues only in the manner provided for in the scheme. The Munsif on 29th April 1939 allowed this objection and held that the execution could not proceed. This decision was affirmed on 22nd September 1939 by the District Judge. It is from this decision that the second appeal is presented. The application in civil revision arises out of the composition scheme itself. The order of the Registrar approving the scheme on 1st June 1938 was taken in appeal to the District Judge who dismissed the appeal on llth July 1939 and it is against that order of dismissal that this application is presented.

It has been argued in support of the appeal that the scheme is an arrangement by way of compromise or agreement between the parties which the judgment-debtor attempted to set up in the executing Court as a bar to the execution of the decree and the first suggestion made is that such an adjustment comes within Order 21, Rule 2, Civil P.C., and the Court ought not to take any notice of it as it has not been certified to the Court in accordance with Order 21, Rule 2. Alternatively it is said that the agreement or composition having been effected before-the decree in the suit was passed might be regarded as an agreement coming within Order 23, Rule 3 and in that case the defendant ought to have put it forward in the suit itself so that the Court might have passed a modified decree in accordance with the agreement arrived at. Failing this the decree must prevail.

We have been shown cases in which, agreements between private parties whether come to during the pendency of a suit or after the passing of a decree with the object of restraining the decree-holder from executing the decree or from executing his decree for the full amount are not to be given effect to by the executing Courbs; for instance, in Atmakuru Butchiah Chetti Vs. S. Tayar Rao Naidu and Others, , it was observed that it would be dangerous to allow a decree itself to be attacked in execution. But before acting on this principle we have to see whether a composition arrived at in pursuance of the provisions of a statute, such as the Bihar and Orissa Co-operative Societies Act, stands on the same footing as a private agreement. The answer to that question seems to be in the negative. Section 24A of the Act reproduces with only verbal modifications the provisions of Section 153, Companies Act, 1913, in the form in which that section stood before the Amending Act of 1936, and Sir M.N. Mukherji in a very ingenious and interesting argument has contended that we ought to look to the decided cases on Section 153, Companies Act, and apply the law in accordance with the decisions of the Calcutta High Court bearing on the interpretation of that section. He admits that it has been held that where a meeting of creditors has resolved to accept a certain scheme, that scheme is binding on all creditors of that class; but it is argued here that a creditor who has obtained a decree for the realization of his debt is not a creditor of the same class as a depositor who has not sued or obtained such'' a decree. Conflicting opinions have been expressed in the Calcutta High Court on this point.

The most recent case which we are shown is that in Rajshahi Banking Corporation v. Surabala Debi 40 C.W.N. 1104, where it was held that a depositor who holds a decree and a depositor who does not hold a decree are not creditors of the same class. That decision however, even assuming it to be correct, is of little advantage to the appellant, because the appellant''s decree was not in existence on the date when the meeting of creditors was held or on the date when the Registrar gave his approval to the composition arrived at. According to the Calcutta decisions themselves it seems to me that the plaintiff or decree-holder must be held to have been at the date of the composition a creditor of the same class as any other fixed depositor.

The principle applicable in such a case arising under the Companies Act was worked out in Raghubar Dayal v. Bank of Upper India, Ltd. of which the decision in India is reported in Raghubar Dayal v. Bank of Upper India Ltd. AIR 1916 Oudh 276 and the decision of their Lordships of the Privy Council in appeal is reported in Raghubar Dayal v. Bank of Upper India Ltd. AIR 1919 P.C. 9. It was clearly held that the plaintiff''s decree having been granted to him after the meeting at which the resolution and the scheme had been agreed to the plaintiff was bound by the scheme.

If we had felt inclined to accede to Sir Manmatha Nath Mukherji''s contention, had the matter been res integra, nevertheless, it would hardly be open for us to do so in view of the decision of this High Court in Buxar Central Co-operative Bank Ltd. Vs. Akhouri Bindhyachal Prasad Singh, , in which a Division Bench of this Court considered a case which appears to be on all fours with the one before us and overruling the decision of the Court below which had ordered execution to proceed, allowed the appeal and held that execution was clearly barred.

It has been pointed out to us that in Raghubar Dayal v. Bank of Upper India Ltd. AIR 1916 Oudh 276, the High Court had allowed the decree-holder to execute his decree to the extent of the costs awarded to him in the suit, while holding that he could not execute it for the amount of his deposit itself, and it is suggested that we should follow that precedent and permit the decree-holder to execute his decree for the costs of the suit. The propriety of that portion of the order of the High Court did not come under the consideration of their Lordships of the Privy Council and we do not know what opinion their Lordships would have taken regarding it had it been in controversy. It seems to us that there are some difficulties in the way of permitting the decree to be executed piecemeal or in part or in saying that without amendment of the decree it can be treated as a decree for a different amount from that named in the decree itself or as a decree for two debts of different classes, and the safer course appears to be to follow the decision of this High Court which I have just cited and to say no more than this that the scheme adopted and accepted is a bar to the execution sought by the decree-holder. This is sufficient to dispose of the miscellaneous appeal.

As regards the civil revision, we are asked to hold that the proceedings at the meeting of the creditors were irregular so that the scheme is invalid. Two or three grounds for so holding have been argued before us but

I do not think it necessary to enter into them because the proper place for agitating those grounds was before the District Judge. They were in fact raised before him and he considered and negatived them. No point of jurisdiction arises and Section 24A(3) is very definite that the order of the District Judge on appeal from the Registrar''s order sanctioning the arrangement shall be final.

I would therefore dismiss the appeal as well as the application in revision with costs. Hearing-fee in the civil revision two gold mohurs.

Shearer J.

I agree.