P L D 1964 Dacca 742 (PLP)

A. K. M. Nurul Islam for Md. Sayedul Huq. This is an application by the Official Liquidator, Noakhali Union Bank Ltd. for staying the operation of the Execution Case No. 13 of 1963 in the Court of the Subordinate Judge, Noakhali. It is stated in the petition that a suit, instituted by the Official Liquidator, was decreed by the trial Court, but on appeal, dismissed by the High Court and a sum of Rs. 1,162‑9‑0, with interest thereon at the rate of 6% per annum was awarded against him. Defendant in this suit thereafter started Money Execution Case No. 13 of 1963 in the Court of Subordinate Judge, Noakhali, for realisation of the cost awarded against the Official Liquidator. The objection raised by the Official Liquidator to the said pro ceeding by reason of the provisions of the Banking Companies Ordinance was rejected by that Court. In this petition it is claimed by him that the said execution case should be stayed. His prayer is founded on the provisions of section 61 of the Banking Companies‑ Ordinance, 1962. Mr. Nurul Islam, learned Advocate for the defendant in the Money Suit No. 7 of 1955, concedes that it is true, the execution proceeding was without jurisdiction, but an order in this behalf may be made by this Court. The Official Liquidator does not oppose the consideration of the question of payment of the cost awarded against him. It seems to me that the matter may be conveniently disposed of in this proceeding instead of its prolongation for a formal application. This money execution case was instituted after the promulga tion of the Banking Companies Ordinance, 1962. Such a proceeding is clearly barred by section 61 of the Ordinance which confers exclusive jurisdiction on the High Court to entertain a claim against a Banking Company which is being wound up subject to provisions relating to transfer of pending proceedings as visualised in 62 of the Ordinance which have however no application to this case. Therefore, I have no hesita tion to hold that the proceeding in the said money execution case is without jurisdiction and has no effect whatsoever and is no binding on the Official Liquidator. It is, however, open to this Court to make an order in respect of costs clearly awarded against him by the High Court. In this case some costs have been awarded against the Official Liquidator. The costs of unsuccessful litigation incurred by the Liquidator are payable out of the assets of the Company in liquidation in priority even to the costs of liquidation itself. That being the position in law, I don't think, I should insist on a formal application and make the Official Liquidator incur further loss in this behalf. Section 193 read with subsection (3) of section 230 of the Companies Act makes it clear that such a cost should be given priority over other costs. I consider it just and fair that the costs awarded against him should be paid by him in priority to other claims. The view expressed above finds support in the case of In Re : Pacific Coast Syndicate, Limited ((1913) 2 Ch. D 26). In that case Neville, J, observed 'as follows: "In my opinion the applicants in the present summons, the defendants in the action, who obtained judgment with costs against the Pacific Coast Syndicate, Limited, are entitled to payment of their full taxed costs of the action in priority to the liquidator's costs in the winding‑up, and it seems to me that that result follows whenever after the commencement of a winding‑up an action is commenced by the liquidator in the name of the company and judgment is given for costs against the company, whether the order is merely for costs, or whether it directs the costs to be paid out of the assets of the company, or whether the liquidator is ordered to pay the costs with liberty to himself afterwards out of the assets of the company. In either case the party entitled to the costs is entitled to payment of them before the costs of the liquidator are paid." I, therefore, order that the liquidator shall pay the costs awarded against him out of the assets of the Company. The costs of this application will also come out of the assets of the Company. S. Q. Order accordingly.