Case: Associated Timber Inds.  Vs. Central Bank Of India

3. The factual backdrop of the case relevant for determination of the question may be stated thusThe Central Bank of India, respondent herein, filed the suit for realisation of certain amount from the Associated Timber Industries, Chabua and others, appellants herein, being the amount due to the Bank towards sums advanced to the defendants. The defendants raised an objection against maintainability of the suit on the ground ofwith the provisions of the Assam Act, particularly SectionTo be more specific the objection was that the Bank being ahas not been registered under the Assam Act; in the absence of a registration certificate, the suit is not maintainable and therefore, cannot be proceeded with.The Additional District Judge, Dibrugarh, framed an issuewhether the suit is maintainable ? The said issue was taken up as a preliminary issue. By the order dated 26th June, 1989 the learned trial judge dismissed the suit as not maintainable. The plaintiff challenged the judgment of the trial Court before the High Court in First Appeal No. 78 of 1989, wherein a Division Bench by the judgment dated 29th July, 1998 set aside the judgment of the trial Court and directed disposal of the suit on merits in accordance with law. The said judgment is under challenge in this appeal.

Court's reasoning:
36. Here we may also take note of the definition of the expressionin some other State. In BombayAct, 1946 Section 2 clause (10) provides thatmeans (I) an individual, or (ii) an undivided Hindu family; or (iiia) a company or (iv) an unincorporated body of individuals, who or which (a) carries on the business ofin the State or (b) has his or its principle place of such business in the State and includes abut does not include(I) Government (ii) a local authority (iii) a bank(iv) the Agricultural Refinance Corporation constituted under the Agricultural Refinance Corporation Act, 1963; or (v) any other banking financial or any institution which the State Government may, by notification in the Official Gazette, specify in this behalf.The expression `business ofis defined in Section (2) to mean the business of advancing loans whether in cash or kind and whether or not in connection with or in addition to any other business.In Tamil NaduAct, 1957 the expression `money lender is defined in Section 2(8) to mean a person whose main or subsidiary occupation is the business of advancing and realizing loans, but excludes a bank or asociety. The explanation to the said Section lays down that where a person who carries on in the (State of Tamil Nadu) the business of advancing and realizing loans is resident outside the State of Tamil Nadu, the agent of such person resident in the State of Tamil Nadu shall be deemed to be thein respect of that business for the purpose of the Act.In the BengalAct, 1940 it is provided that loan means an advance whether of money or in kind, made on condition of repayment with interest and includes any transaction which is in substance a loanbut does not include......(d) a loan advanced before or after the commencement of this Act (I) by a bank; or (ii) by alife insurance society,society, insurance company, life assurance company (Life Insurance Corporation of India) mutual insurance company, provident insurance society or provident society or from a provident fund. The termis defined in Section 2(13) of that Act to mean a person who carries on the business ofin West Bengal or who has a place of such business in West Bengal and includes a pawnee as defined in Section 172 of the Indian Contract Act, 1872.From the provisions in the other State enactments also it is clear that the legislatures have taken caution to exclude banks from the operations of the statutes presumably with a view to avoid any conflict with the Parliamentary enactment. Unfortunately, the AssamAct, 1934 does not incorporate any such provision in it. It may be noted here that `banking is covered under item No. 45 inof the Union List of the VII Schedule of the Constitution, while; Relief of Agricultural indebtedness comes under Item 30 of List IIState List of the VIIth Schedule.