PETITIONER:
STATE BANK OF TRAVANCORE
Vs.
RESPONDENT:
GOODLAND PLANTATIONS (P) LTD.
DATE OF JUDGMENT07/11/1979
BENCH:
KOSHAL, A.D.
BENCH:
KOSHAL, A.D.
UNTWALIA, N.L.
SHINGAL, P.N.
CITATION:
1980 AIR 650 1980 SCR (1)1157
1980 SCC (1) 389
ACT:
Banking Regulation Act, 1949 Section 45(10)-Scope of.
HEADNOTE:
The respondent Company, a subscriber, had to pay money
in monthly instalments to a Chitty run by the Orient Bank.
The last instalment was paid on December 10, 1960. The
respondent was the successful bidder. The prize amount was
to be paid to the respondent on January 10, 1961. But before
that date the Central Government imposed a Moratorium,
originally for the period ending with the March 18, 1961
which later on was extended upto June 16, 1961 on the Orient
Bank with the result that the Orient Bank had to suspend all
its business activity. This resulted in the conduct of the
Chitty being discontinued, so that the Chitty stood
terminated and the Orient Bank in its capacity as the
Foreman of the Chitty incurred the obligation to pay back
all the contributions made by non-prized subscribers.
The Central Government sanctioned a scheme under the
Banking Regulation Act for the amalgamation of the Orient
Bank with the appellant (Travancore Bank). Realising that
the Travancore Bank would not be able to continue the
Chitties for which the Orient Bank had acted as Foreman
because those Chitties had terminated owing to the failure
of the Orient Bank to continue to conduct them by reason of
the Moratorium, the Central Government passed an order on
December 4, 1961 under section 45(10) of the Banking Act.
This order was further amended substituting the words "the
31st March 1962" for the words "31st December 1961", the
effect of which was to obliterate the termination of the
Chitties as resulting from the suspension thereof by reason
of the moratorium during the period from December 18, 1960
to 31st March, 1962, and to enable the appellant-Bank to
continue those Chitties as if there had been no suspension
at any point of time, so that they could be continued as if
the relevant provisions of the Chitties Act and the relevant
variolas had throughout been complied with.
The respondent filed a suit claiming refund of the four
instalments paid by it along with interest. There was no
reference to the impugned order presumably because the
respondent had no knowledge thereof. The suit was resisted
on the strength of the impugned order dated 15-1-1962, but
the vires of that order was challenged by the respondent and
it was urged that the impugned order did not fall within the
ambit of sub-section (10) of section 45 of the Banking Act
and that in any case that sub-section itself was
constitutionally invalid. The suit was transferred by the
High Court to its own file, from the Court of Munsif as the
constitutional validity of section 45(10) of the Banking Act
was questioned. The suit was dismissed.
The respondent instituted an appeal which was accepted
by the Division Bench. Disagreeing with the trial judge as
to the object of the scheme of
1158
amalgamation the Division Bench held that sub-section (10)
did not suffer from excessive delegation of legislative
power.
It was urged on behalf of the respondent in this Court
that one of the objects of the scheme was to continue the
Chitties to a successful conclusion as held by the trial
Judge and that the finding to the contrary recorded in the
impugned judgment was erroneous.
Allowing the appeal,
^
HELD: The pervasive provisions embraced in the later
part of paragraph 2 of the scheme embraced within their
ambit a complete transfer of all rights and liabilities, of
whatsoever nature, of the Orient Bank to the appellant-Bank
and no special provision was therefore needed to be included
in the scheme in regard to Chitties, if they were not to be
continued to a successful conclusion. As it is, the portion
of paragraph 2 provides for Chitties on a special footing
which could not have been the case if the right and
liabilities of the Orient Bank in regard to Chitties were
sought to be transferred to the appellant Bank on the basis
of the termination of the Chitties which had already become
operative because of the Moratorium and as a consequence of
suspension of the Chitty business by the Orient Bank. Nor
was it necessary to provide in clause (1) of paragraph 2 of
the scheme that "the transferee Bank shall become the
forman....and shall continue to exercise all powers and to
do all such acts and things as would have been exercised or
done by the transferor Bank...." if the Chitties were to be
dealt with as having come to termination. The special
provision for the Chitty business cannot be regarded as
redundant and it was obviously made with a purpose which, in
the circumstances of the case, could be nothing more or less
than to provide for the continuation of the Chitties in
supersession of their termination. No other reasonable
explanation of that special provision appears possible. And
if that be so, the entire reasoning adopted in the judgment
of the Division Bench for arriving at the conclusion that
the impugned order was beyond the scope of sub-section (10)
of section 45 of the Banking Act would become unacceptable;
for, in that case, the difficulty which the impugned order
sought to overcome would become very real so that the
Central Government would be fully competent under the
provisions of that sub-section to pass an order removing
that difficulty and the order actually passed could not be
considered to be inconsistent with the provisions of the
scheme to any extent or in any manner. The impugned order
therefore did not fall outside the scope of the power
conferred on the Central Government under sub-section (10)
of section 45 of the Banking Act. [1168 E-H, 1169 A-C]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2531 of
1969.
From the Judgment and Order dated 20-1-1969 of the
Kerala High Court in A.S. No. 39/65.
P. Govindan Nair and K.J. John for the Appellant.
M.R.K. Pillai for the Respondent.
The Judgment of the Court was delivered by
KOSHAL, J.-For a proper appreciation of the dispute
giving rise to this appeal by Special Leave against the
judgment dated 20th of
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January, 1969, of a Division Bench of the High Court of
Kerala, a reference to various provisions of the Travancore
Chitties Act (herein-after called the ‘Chitties Act’) being
Act XXVI of 1120 (which year corresponds to years 1944 and
1945 of the Christian era) is necessary. Clause (2) of
section 3 of the Chitties Act defines a ‘chitty’ thus:
“A ‘chitty’ means a transaction by which one or
more persons hereinafter called the foreman or foremen
enter into an agreement with a number of persons, that
every one of the contracting parties shall subscribe a
certain amount of money or quantity of grain by
periodical instalments for a certain definite period
and that each in his turn, as determined by lot or by
auction or in such other manner as may be provided for
in the variola, shall be entitled to the prize amount.”
“Chitty amount” is defined in clause (3) of section 3 to
mean the sum total of the contributions payable by all the
subscribers for any instalment without any deduction for
discount. In clause (4) the term ‘discount’ is stated to
mean the amount of money or quantity of grain which a prize
winner has, under the terms of the variola, to forego for
payment of veethapalisa, foreman’s commission or other
expenses. A ‘foreman’ as per clause (6) is the person who,
under the variola, is responsible for the conduct of the
chitty. ‘Variola’ is defined in clause (14) to be a document
containing the articles of agreement between the foreman and
the subscribers in relation to the chitty while, under
clause (15) ‘veethapalisa’ is the share of a subscriber in
the discount available under the variola for rateable
distribution among the subscribers at each instalment of the
chitty. ‘Prize amount’ says clause (9), means the chitty
amount reduced by the discount.
Section 9 enumerates 13 particulars which a variola
must contain and they are:
(1) the full name and residence of every
subscriber;
(2) the number of tickets or the fraction thereof
held by each subscriber;
(3) the number of instalments and the amount
payable for each ticket at every instalment;
(4) the date on which the chitty is to begin and
the date on which it is to terminate;
(5) the mode of ascertaining the prize winner at
the successive instalments;
(6) the amount of discount which a prize winner
at any instalment has to forego;
1160
(7) the mode and proportion in which the discount
is distributable by way of veethapalisa,
foreman’s commission and other allowance, if
any;
(8) the time and place at which the chitty is to
be conducted;
(9) the instalment at which the foreman is to get
the prize;
(10) the approved banks in which chitty moneys
shall be invested by the foreman under the
provisions of the Act;
(11) the consequence which a non-prized or prized
subscriber, or the foreman, will be liable to
in case of any violation of the variola;
(12) the nature and particulars of the security
offered by the foreman under section 17; and
(13) any other particulars that may from time to
time be prescribed by the Government.
Section 14 deals with the time and place where the drawing
of prizes in a chitty shall be conducted. Section 17 to 24
relate to the rights and liabilities of a foreman while the
next three sections following provide for non-prized
subscribers. Sections 29 to 32 embrace provisions regarding
prized subscribers. Sections 38, 39 and 41 relate to
termination of chitties and may be reproduced here with
advantage:
“38. (1) When a foreman dies or becomes of unsound
mind his legal representative or his guardian as the
case may be, shall, in the absence of any provision in
the variola to the contrary, take the place of the
foreman and have the right to continue the chitty or to
make suitable arrangements for the further conduct of
the chitty.
(2) When a foreman is adjudicated an insolvent
under the law relating to insolvent debtors for the
time being in force or withdraws from the chitty under
section 24 or fails to conduct the chitty at any
instalment or any other date before the next succeeding
instalment as may have been agreed upon by a special
resolution in that behalf, any one or more of the
nonprized subscribers authorized by a special
resolution may, in the absence of any provision in the
variolas for the future conduct of the chitty, take the
place of the foreman and have the right to continue the
chitty or to make suitable arrangements for the further
conduct of the chitty.”
1161
“39. A chitty shall be deemed to have terminated only-
(1) When the period fixed in the variola or the
period as altered by a subsequent special resolution
for the duration of the chitty has expired, or
(2) when the legal representative of a deceased
foreman or the guardian of a foreman of unsound mind or
the subscriber or subscribers selected therefor fail to
conduct the chitty or make suitable arrangements for
the further conduct of the chitty as provided for in
section 38;
Provided however that if there are more foremen
than one and one or more such foremen are living and
are not disqualified to act under section 38, the
chitty shall not be deemed to have terminated under
this clause if there is provision in the variola
enabling the remaining foreman or foremen to conduct
the chitty or if the non-prized subscribers agree by a
special resolution to the conduct of the chitty by the
remaining foreman or foremen.”
“41. Except in the case of clause (1) of section
39, every non-prized subscriber shall, unless otherwise
provided for in the variola and subject to the
provisions of section 27, be entitled to get back his
contributions at the termination of the chitty without
any deduction for veethapalisa, if any, received by
him.”
2. The facts are undisputed and may be briefly stated.
The plaintiff, viz., the Goodland Plantations (P) Ltd.,
(hereinafter referred to as the ‘Company’) became a
subscriber to a monthly chitty run by the Kottayam Orient
Bank Limited (‘the Orient Bank’ for short) as foreman. The
Company was to pay, like all other subscribers, a sum of Rs.
20,000/- in 50 monthly instalments of Rs. 400/- each. The
conduct of the chitty was governed by variola exhibit P-1,
apart from the various provisions of the Chitties Act. The
chitty started on the 10th of September, 1960, when the
Company paid the first instalment due from it. Three other
instalments were paid by the Company on 10-10-1960, 10-11-
1960 and 10-12-1960 to the foreman. On the date last
mentioned, an auction was held for the prize amount for
which the Company was declared to be the successful bidder,
it having elected to accept a sum of Rs. 11,075/- in lieu of
the full amount of Rs. 20,000/-. The prize amount was to be
paid to the Company a month later, i.e., on the 10th of
January, 1961, (when the fifth instalment was to become
payable) subject to the Company furnishing security for the
continued
1162
performance of its part of the variola in future. However,
before that stage was reached, the Central Government, on
the 17th of December, 1960, imposed a moratorium on the
Orient Bank under section 45 (2) of the Banking Regulation
Act, 1949, (hereinafter referred to as ‘the Banking Act’)
with the consequence that the Orient Bank had to suspend all
business/activity. The moratorium was enforced originally
for the period ending with the 18th of March, 1961, which
was later on extended upto the 16th of June, 1961, (exhibits
D-1, D-2 and D-4). The suspension of business resulted in
the conduct of the chitty being discontinued so that under
sub-section (2) of section 39 of the Chitties Act read with
section 41 thereof as also clause (14) of the variola, the
chitty stood terminated and the Orient Bank in its capacity
as the foreman of the chitty incurred the obligation to pay
back all the contributions made by non-prized subscribers.
On the 16th of May, 1961, the Central Government
sanctioned under sub-section (7) of section 45 of the
Banking Act a Scheme prepared by the Reserve Bank of India
under sub-sections (4) to (6) of that section for the
amalgamation of the Orient Bank with the State Bank of
Travancore (hereinafter called the ‘Travancore Bank’). The
Scheme provided inter alia that all the assets and
liabilities of the Orient Bank would stand transferred to
the Travancore Bank with effect from the 17th of June, 1961.
In relation to chitties the Scheme laid down:
“If the transferor bank was acting immediately
before the prescribed date as a foreman in respect of
any kuri or chitty as defined in the Travancore
Chitties Act (XXVI of 1120) or the Cochin Kuries
Regulation (VII of 1107) the rights, duties and
obligations in relation to the kuri or chitty shall be
regulated in accordance with the following provisions,
namely,
(i) the transferee bank shall become the foreman
of the kuri or chitty and shall continue to exercise
all powers and to do all such acts and things as would
have been exercised or done by the transferor bank, in
so far as they are not in consistent with this scheme;
(ii) the funds, if any, of the kuri or chitty lent
to or deposited with the transferor bank, or otherwise
due from that bank to the kuri or chitty shall be
transferred to the transferee bank, and the liabilities
corresponding to such funds shall also be payable by
the transferee bank in accordance with the other
provisions of this scheme;
1163
(iii) if on the prescribed date the transferor
bank in its capacity as the foreman of any kuri or
chitty has deposited any security for the due
performance of its duties and obligations in relation
to the said kuri or chitty, the said security shall
continue to be available for the purposes for which it
was intended, but shall if and to the extent that it is
subsequently released be transferred to and vest in the
transferee bank provided that the said security or as
the case may be, the surplus, if any, after providing
for the discharge of the duties or obligations in
respect of the kuri or chitty shall be valued and
utilised for the purposes of this scheme.”
Later on it was realised that the Travancore Bank would
not be able to continue the chitties for which the Orient
Bank had acted as foreman earlier because those chitties had
terminated owing to the failure of the Orient Bank to
continue to conduct them by reason of the moratorium and in
order to cross this hurdle the Central Government passed
another order dated the 4th of December, 1961, which was
described as the Kottayam Orient Bank Limited (Amalgamation
with the State Bank of Travancore) (Removal of Difficulties)
Order, 1961. That order (hereinafter called the ‘impugned
order’) was passed under sub-section (10) of section 45 of
the Banking Act and its relevant portion is extracted below:
“2. Notwithstanding anything contained in the
Travancore Chitties Act or the Cochin Kuries
Regulation, the suspension of any kuri or chitty for
the period from the 18th December, 1960, to the 31st
December, 1961, or for any part of that period and any
consequent prolongation of the kuri or chitty shall
have effect as though the articles in the variola(s)
were altered or added to for that purpose by special
resolution(s) of the subscribers of the kuri or
chitties and as though the relevant provisions, if any,
of the Travancore Chitties Act or the Cochin Kuries
Regulation were complied with, and notwithstanding
anything contained in the Travancore Chitties Act or
the Cochin Kuries regulation, the failure of the
foreman to conduct the kuri or chitty during the said
period shall not be deemed to have terminated the kuri
or chitty.”
“3. Notwithstanding anything contained in the
variola (s) the period fixed for the duration of the
kuri or chitty shall be deemed to have been extended by
the period referred to in 2 above.”
1164
“4. Notwithstanding anything contained in the
Travan-core Chitties Act or the Cochin Kuries
Regulation, the State Bank shall continue the kuri or
chitty as if the provisions, if any of the said Act or
the said Regulation relating to continuance of the kuri
or chitty have been complied with.”
“5. All the words and expressions used herein but
not defined shall have the meanings respectively
assigned to them in the Travancore Chitties Act, or as
the case may be, the Cochin Kuries Regulation.”
By another order dated the 15th of January, 1962,
(exhibit P-4) the impugned order was amended so that the
words “the 31st March, 1962” were substituted for the words
“31st of December, 1961” occurring in paragraph 2 thereof.
The effect of the impugned order as amended by order
exhibit P-4 was to obliterate the termination of the
chitties as resulting from the suspension thereof by reason
of the moratorium during the period from the 18th of
December, 1960, to the 31st of March, 1962, and to enable
the Travancore Bank to continue those chitties as if there
had been no suspension thereof at any point of time so that
they could be continued as if the relevant provisions of the
Chitties Act and the relevant variolas had throughout been
complied with.
3. The litigation started with a suit instituted by the
Company on the 6th of December, 1961, claiming refund of the
four instalments paid by it along with interest. No
reference was made in the plaint to the impugned order
presumably because the Company had no knowledge of the
existence thereof as it had been passed only a couple of
days before the suit was filed. The claim of the Company was
based on the averment that the Orient Bank had failed to
conduct the chitty to which the Company had subscribed, that
the chitty had come to a termination by reason of the
default made by the Orient Bank, that the Orient Bank had in
consequence become liable for payment back to the Company of
the instalments deposited by it and that the Travancore Bank
(the sole defendant) had inherited the liability of the
Orient Bank.
The suit was resisted on the strength of the impugned
order (as amended by order exhibit P-4) but the vires of
that order were challenged by the Company on whose behalf it
was urged that the impugned order did not fall within the
ambit of sub-section (10) of section 45 of the Banking Act
and that in any case that sub-section itself was
constitutionally invalid inasmuch as its enactment amounted
to an abdication of the legislative power which, under
Article 245 of
1165
the Constitution of India, vested in Parliament and in
Parliament alone.
4. The suit was originally filed in the Court of the
Munsif at Kottayam but was transferred by the High Court to
its own file in 1963 because the constitutional validity of
sub-section (10) of section 45 of the Banking Act was
questioned.
5. The suit was dismissed by Raman Nayar, J., who held
that the impugned order fell squarely within the scope of
sub-section (10) of section 45 of the Banking Act, which
sub-section also did not suffer, according to the learned
judge, from the infirmity of excessive delegation. Sub-
section (10) states:
“If any difficulty arises in giving effect to the
provisions of the scheme, the Central Government may by
order do anything not inconsistent with such provisions
which appears to it necessary or expedient for the
purpose of removing the difficulty.”
Raman Nayar, J., noted that the three requirements of
the sub-section were:
“(1) that a difficulty should arise in giving
effect to the provisions of the scheme;
(2) that the order to be made must be such as
appears to the Central Government to be necessary or
expedient for the purpose of removing the difficulty;
and
(3) that the order must not be inconsistent with
any of the provisions of the scheme”:
and found that all three of them were amply satisfied in the
present case. In his view the object of the Scheme
promulgated by the Central Government on the 16th of May,
1961, under sub-section (7) of section 35 of the Banking Act
was that the Travancore Bank should take over the business
of the chitties earlier run by the Orient Bank and conduct
the same to a “successful conclusion”. However, that object,
according to the learned Judge, could not be achieved as the
Scheme did not provide for an obliteration of the
termination of the said chitties which had already taken
place under sub-section (2) of section 38 of the Chitties
Act read with sub-section (2) of section 39 thereof and the
provisions contained in the variolas. The learned Judge was
clearly of the opinion therefore that a difficulty had
arisen in giving effect to the provisions of the Scheme
which was sought to be remedied by the impugned order. The
argument that the Scheme
1166
did not envisage the continuation of the chitties by the
Travancore Bank, that all that the Scheme provided for was
that the rights and obligations of the orient Bank in
relation to the chitties stood transferred to the Travancore
Bank and that in consequence, the latter became liable for
the return of the amounts deposited by the subscribers with
the Orient Bank, was turned down by the learned Judge with
the following observations:
“It is no use saying that the defendant Bank could
have had no difficulty in accepting that the chitty had
terminated and paying off the unprized subscribers.
For, that would not be to work the scheme which clearly
contemplates that the defendant bank should run the
chitties to a successful conclusion. The difficulty
that stood in the way of this being done was certainly
a difficulty in giving effect to the provisions of the
Scheme”.
For repelling the contention put forward on behalf of
the Company about the constitutional invalidity of sub-
section (10) of section 45 of the Banking Act, the learned
Judge relied on In re Art. 143 Constitution of India,
etc.(1) and Rajnarain Singh v. Chairman, P.A. Committee (2).
6. Against the dismissal of its suit, the Company
instituted the appeal which was accepted by the Division
Bench through the judgment challenged before us. Isaac, J.,
speaking for himself and Pillai, J., disagreed with the
learned trial Judge as to the object of the Scheme of
amalgamation and observed that in so far as the chitties
were concerned, there was nothing in the Scheme to show that
such object was to run them to a successful conclusion. He
was further of the opinion that there was no difficulty at
all in the way of the Scheme, as originally promulgated,
being given effect to In this connection he remarked:
“There is no difficulty in paying the amount. The
difficulty is only for not paying it; and what was
achieved by exhibits P-3 and P-4 was the creation of
that difficulty. What exhibit P-3 provides is that the
period during which the chitty was not conducted would
be treated as a period of suspension of the chitty by a
special resolution of the subscribers. The result of
that provision was that the right of the plaintiff to
get from the defendant the amount subscribed to the
chitty was taken away and substituted with a liability
to
1167
draw the prize amount on furnishing security for
payment of future instalments. This is a provision
which is clearly inconsistent with the provisions of
the Scheme. Exhibits P-3 and P-4 are, therefore in my
view beyond the scope of the power conferred on the
Central Government under sub-section (10) of section 45
of the Banking Companies Act.”
In regard to the question of constitutional validity of
sub-section (10), however, the Division Bench concurred with
the learned trial Judge and held that sub-section (10) did
not suffer from excessive delegation of legislative power.
Allowing the appeal, the Division Bench decreed the
suit with costs of the proceedings in both the courts.
7. The question of the constitutional validity of sub-
section (10) of section 45 of the Banking Act has not been
raised before us and all that we have to determine therefore
is whether the impugned order falls within or outside the
scope of that sub-section.
8. Shri Govindan Nair, learned counsel for the Company,
has vehemently contended that one of the objects of the
Scheme was to continue the chitties (which had earlier been
conducted by the Orient Bank but had come to a termination
by reason of the moratorium) to a “successful conclusion” as
held by the learned trial Judge and that the finding to the
contrary recorded in the impugned judgment is erroneous and
after hearing him and learned counsel for the Travancore
Bank at length we have no hesitation in agreeing with Shri
Nair’s contention. It is to be noted that the provision
regarding chitties appears in the latter part of paragraph 2
of the Scheme, the earlier part of which may be quoted here
with advantage:
“(2) As from the date which the Central Government
may specify for this purpose under sub-section (7) of
section 45 of the said Act (hereinafter referred to as
the prescribed date) all rights, powers, claims,
demands, interests authorities, privileges, benefits,
assets and properties of the transferor bank, movable
and immovable, including premises subject to all
incidents of tenure and to the rents and other sums of
money and covenants reserved by or contained in the
leases or agreements under which they are held, all
office furniture, loose equipment, plant apparatus and
appliances, books, papers, stocks of stationery, other
stocks and stores, all investment in stocks shares and
securities all bills receivable in hand and in transit,
all cash
1168
in hand and on current or deposit account (including
money at call or short notice) with banks, bullion, all
books debts, mortgage debts and other debts with the
benefit of the securities, or any guarantee therefor,
all other, if any, property rights and assets of every
description including all rights of action and benefit
of all guarantees in connection with the business of
the transferor bank shall, subject to the other
provisions of this Scheme, stand transferred to, and
become the properties and assets of, the transferee
bank; and as from the prescribed date all the
liabilities, duties and obligations of the transferor
bank shall be and shall become the liabilities, duties
and obligations of the transferee bank to the extent
and in the manner provided hereinafter.
Without prejudice to the generality of the
foregoing provisions all contracts, deeds, bonds,
agreements, power of attorney, grants of legal
representation and other instruments of whatever nature
subsisting or having effect immediately before the
prescribed date shall be effective to the extent and in
the manner hereinafter provided against or in favour of
the transferee bank and may be acted upon as if instead
of the transferor bank the transferee bank had been a
party thereto or as if they had been issued in favour
of the transferee bank.”
These pervasive provisions embraced within their ambit
a complete transfer of all rights and liabilities of
whatever nature, of the Orient Bank to the Travancore Bank
and no special provision was therefore needed to be included
in the Scheme in regard to chitties if they were not to be
continued to a “successful conclusion”. As it is, the
portion of paragraph 2 extracted by us earlier did provide
for chitties on a special footing which could not have been
the case if the rights and liabilities of the Orient Bank in
regard to chitties were sought to be transferred to the
Travancore Bank on the basis of the termination of the
chitties which had already become operative because of the
moratorium and as a consequence of suspension of the chitty
business by the Orient Bank. Nor was it necessary to provide
in clause (1) occurring in paragraph 2 of the Scheme that
“the transferee bank shall become the foreman.. and shall
continue to exercise all powers and to do all such acts and
things as would have been exercise or done by the transferor
bank..” if the chitties were to be dealt with as having come
to a termination. The special provision for the chitty
business in the Scheme cannot be regarded as redundant and
it was obviously made with a purpose
1169
which, in the circumstances of the case, could be
nothing more or less than to provide for the continuation of
the chitties in supersession of their termination. No other
reasonable explanation of that special provision appears to
us possible. And if that be so, the entire reasoning adopted
in the impugned judgment for arriving at the conclusion that
the impugned order was beyond the scope of sub-section (10)
of section 45 of the Banking Act would become unacceptable;
for, in that case, the difficulty which the impugned order
sought to overcome would become very real so that the
Central Government would be fully competent under the
provisions of that sub-section to pass an order removing
that difficulty and the order actually passed could not be
considered to be inconsistent with the provisions of the
Scheme to any extent or in any manner.
9. In the result we hold that the impugned order did
not fall outside the scope of the power conferred on the
Central Government under sub-section (10) of section 45 of
the Banking Act and reverse the finding to the contrary
recorded in the impugned judgment. Allowing the appeal,
therefore, we set aside the impugned judgment and dismiss
the suit but, in the circumstances of the case, leave the
parties to bear their own costs throughout.
N.K.A. Appeal allowed.
1170