P L D 1954 Lahore 667 (PLP)

S. A. RAHMAN, J.‑‑This order will dispose of an appeal cinder clause 10 of the Letters Patent from an order of the learned Liquidation judge directing that the Punjab and Kashmir Bank Limited be wound up. The State Bank of Pakistan, which had been functioning as the Provisional Liquidator, was appointed the Official Liquidator of the Bank. The proceedings were initiated before the learned judge by the State Bank of Pakistan under subsection (3) of section 15 of the Banking Companies (Control) Act, 1948 (Act XXII of 1948) (hereinafter referred to as the Act). The petition was grounded on the fact that in spite of a notice issued to the appellant Bank to submit certain returns within thirty days of the notice issued under subsection (3) of section 15 of the Act, the order had not been complied with and consequently the appellant Bank was liable to be compul sorily wound up. It was not denied on behalf of the appellant before the learned Liquidation Judge that they had failed to submit returns under sections 8 (3) and 9 (2) of the Act since June 1950 and that they had never submitted any return required to be made under section 10 (1) of the Act. They admitted receipt of thirty days notice to comply with .the requisite direction under section 15 (3) of the Act. They adopted the position that with effect from the 9th or 10th of May 19419, when the State Bank of Pakistan had prohibited the appellant company from receiving any fresh deposit, they had ceased to be a "banking company within the meaning of the Act. This claim was negatived by the learned Liquidation Judge and the same point has been reagitated before us. "Banking company" is defined in clause (a) of section 5 of the Act as follows :‑ "Banking company" means a banking company as defined in section 277F of the Indian Companies Act, VII of 1913, and includes the Imperial Bank of India and any body of persons incorporated by or under any law in force in any place outside the provinces and carrying on the business of a banking company in any province or any Acceding State." In this context, as declared by clause (d) of the section, "the Provinces" means the Provinces of Pakistan and except in subsection (2) of section 1, include the Capital of the Federation. The material portion of section 277F of the Companies Act, 1913, is in these terms :‑ 'A banking company' means a company which carries on as its principal business the accepting of deposits of money on current account or otherwise, subject to withdrawal by 'cheque, draft or order, notwithstanding that it engages in addition in any one or more of the following forms of business, namely :‑ Provided that any company which uses as part of the name under which it carries on business the word `bank', 'banker' or `banking' shall be deemed to be a banking company notwithstanding that the accepting of deposits of money on current account or otherwise, subject to withdrawal by cheque, draft or order, is not, or is not shown to be, the principal business of 'the company.' The proviso to this section was inserted by the Indian Companies (Second Amendment) Act XXI of 1942 and came into force on the 1st of November 1943 by means of a gazette notification. In the face of this proviso it was con ceded by Mr. Rahim Bakhsh on behalf of the appellant company that the appellant was a "banking company" within the meaning of section 277F of the Companies Act, 1913. His contention, however is that section 5 of the Act requires something more than the satisfaction of the definition of a "banking company" in the Companies Act, before its provisions can be attracted thereto. He stresses the words "carrying on business of a banking company in any Province or any Acceeding State" in this section as significant. The argument put briefly is that since the prohibition imposed on the appellant company by the State Bank of Pakistan with effect from the 9th or 10th of May 1949, the principal business of receiving deposits from customers had come to an end and, therefore, the appellant company could no longer be said to be carrying on business within any Province of Pakistan. I consider the contention raised to be unsound. If the appellant company is a "banking company" within the meaning of section 277F of the Companies Act, 1913, as is conceded, it clearly would also be a "banking company" for the purposes of the Act. The words occurring in clause (a) of section 5 of the Act following the figure "1913", are words of extension and not words of limitation such as would cut down the scope of definition of the term. Reference in this connection may be made to the discussion at pp. 197 to 199 of Craies on Statute Law, 5th Edition. It is also admitted that before May 1949, the appellant company fulfilled all the conditions of a banking company within the purview of the Act. Merely because under section 11 (1) (a) of the Act the State Bank of Pakistan had prohibited the appellant company from accepting fresh deposits owing to certain reasons, it does not follow that the company forthwith ceases to be a "banking company". As was pointed out by the learned Liquidation Judge, this would mean, if the argument is pushed to its logical extreme, that as soon as such a prohibitory order is passed, the company being no longer subject to the provisions of the Act but still being a "banking company" for the purposes of the Companies Act, could with impunity invite fresh deposits. This would make the provisions of the Act wholly nugatory. Such an unreasonable interpretation which militates against the advancement of the remedy provided for by the Legislature in the Act, should not be adopted unless the language used proves intractable and‑cannot conceivably be susceptible of another interpreta tion. We are not convinced that this is the case. The prohibitory order did not after all wipe out the deposits already in the possession of the Bank and it continued to deal with them. In our opinion, the words "carrying on the business of a banking company" should not be too narrowlly construed. There are other indications in the material on the file pointing to the inference that the appellant company had not ceased its business even after May 1949. Exh R W 15/4 is a return submitted by this very company to the State Bank of Pakistan on the 21st of February 1950. It shows inter alia the cash in hand on four Fridays during the month o: February 1950. On the first Friday the cash in hand was Rs. 328‑4, on the second and third Fridays it dwindled to a lowfigure but on the fourth Friday it rose up to Rs. 515‑10‑6. This is enough to show that the Bank was functioning and receiving some money in cash so that it was not entirely defunct, On this additional ground also we are disposed to hold that there is no substance in the plea taken by the appellant company. Mr. Rahim Bakhsh attempted to argue that the appellant company was prevented from submitting the return owing to circumstances beyond its control. It is urged that the records of some branches of the company had been lost or destroyed and they were, therefore, in no position to submit accurate and full returns. Reference was made to subsection (1) of section 15 of the Act, which provides for the punishment of any person making a false statement or omitting to make a material statement, wilfully, with knowledge of the facts. Mr. Rahim Bakhsh contends that if imperfect returns had been submitted, his clients would have come within the mischief of this provision. He entirely omits to take note, however, of the word "wilfully" occurring in this provision. No one could have hauled up the appellant company for making incomplete returns owing to circumstances not within its control. Indeed, before June 1950, some returns had been made, based on the imperfect material with the appellants and similar information could have been furnished even afterwards. Apart from this consideration, it is clear that the language of subsection (3) of section 15 is peremptory and once it is established that the banking company in question has failed to comply with a demand to submit returns within thirty days and the State Bank of Pakistan applies to the Court for an order of winding up, the Court would have no option but to grant the request. As soon as there is a breach of the statutory duty committed, which is an absolute duty cast on the banking company, the penal provisions of subsection (3) of section 15 of the Act are attracted. I find no ground for differing from the opinion of the learned Liquidation Judge that the appellant company had made itself liable to be wound up compulsorily at the instance of the respondent, the State Bank of Pakistan. There is no force in this appeal, which I would dismiss with costs. ORTCHESON, J‑I agree. A. H. Appeal dismissed.