2.

1Wi
ndi
ngupbyHi
ghCour
t

Fort
heprocessofwindi
ngupS.391,S.392,
S.433andS.583i
snotappli
cabl
eforbanki
ng
company.AsperS.37(1)oft
heBankingRegulat
ionActt
heHighcour
tcanorderforwi
ndi
ngup
ofabankingcompanyonbasi
soffol
lowingconditi
ons

1.I
fthebanki
ngcompanyi
sunabl
etopayi
tsdebt
s;or

2.I
fanappli
cat
ionf
ori
tswi
ndi
nguphasbeenmadebyt
heReser
veBankundersect
ion37or
thi
ssect
ion.

TheReserv
eBankcanalsomakeanappl
i
cat
ionundersect
ion38forthewindi
ngupofa
banki
ngcompanyi
fiti
sdirect
edsot
odobyanorderundercl
ause(b)ofsub-
sect
ion(
4)of
sect
ion35.

TheReser
veBankmaymakeanappl
i
cat
ionundert
hissect
ionf
ort
hewi
ndi
ngupofabanki
ng
company-

Ifthebankingcompanyhasf ai
ledt
ocompl ywiththerequir
ementsspecif
iedinsecti
on11; or
hasbyr easonoftheprovi
sionsofsecti
on22becomedi senti
tl
edtocarr
yonbanki ngbusinessin
India;orhasbeenprohi
bit
edf r
om r
eceivi
ngfreshdepositsbyanorderunderclause(
a)ofsub-
sect i
on(4)ofsect
ion35orunderclause(b)ofsub-sect
ion(3A)orsect
ion42oft heReserve
BankofI ndia,
Act,
1934.

I
fthecompanyhasfail
edtocomplywithanyrequir
ementoftheActothert
hanthe
r
equir
ementslai
ddowni nsect
ion11,
hascont i
nuedsuchfai
l
ure,af
ternoti
cei
nwriti
ngofsuch
f
ail
ureorcont
ravent
ionhasbeenconveyedt
ot hebanki
ngcompany .

Whenhighcour
tor
derf
orwi
ndi
ngupal
i
qui
dat
ori
sappoi
ntedbyt
hecour
tunderS.
38Awhi
chi
s
asf
oll
ow

(1)Ther
eshallbeat
tachedtoever
yHighCourtacour tl
iqui
datortobeappoi
ntedbytheCentr
al
Governmentfort
hepurposeofconducti
ngall
proceedingsforthewindi
ngupofbanking
companiesandperf
ormingsuchotherduti
esinr
eferencetheretoastheHi
ghCourtmayi mpose.
(2)Wher ehavingregardtothenumberofbankingcompanieswoundupandot her
cir
cumst ancesofthecase, t
heCent r
alGover
nmentisofopini
onthati
tisnotnecessaryor
expedienttoattachfortheti
mebei ngacourtli
qui
datort
oaHighCourt,i
tmay ,
from ti
met o
ti
me, bynotif
icati
onintheOf f
ici
alGazett
e,di
rectt
hatthi
ssect
ionshal
lnothaveeffectin
rel
ati
ont othatHighCour t
.]

39.Reser
veBankt
obeof
fi
cial
li
qui
dat
or

(1)Notwi
thstandi
ngany thi
ngcontainedinsection38AofthisActorinsecti
on448orsect ion
449oftheCompani esAct ,
1956( 1of1956),wher einanyproceedi
ngforthewindingupbyt he
HighCourtofabanki ngcompany ,anappli
cati
oni smadebyt heReserv
eBanki nthisbehal f,
the
Reserv
eBank, theStateBankofI ndiaoranyot herbanknoti
fiedbytheCentral
Gov ernmenti n
thi
sbehalforanyindiv i
dualasstatedinsuchappl i
cati
onshallbeappoi
ntedast heoff i
cial
l
iqui
datorofthebanki ngcompanyi nsuchproceedingandtheliqui
dat
or,i
fany,functioningin
suchproceedingshall v
acateoff
iceuponsuchappoi ntment
.

(2)Subjecttosuchdirect
ionsasmaybemadebyt heHighCourt,t
heremunerationofthe
offi
cial
liquidat
orappoint
edunderthissecti
on,thecostandexpensesofhisestabli
shmentand
thecostandexpensesoft hewindi
ngupshal l
bemetoutoft heassetsofthebankingcompany
whichisbei ngwoundup, andnotwit
hstandi
ngany t
hingtothecontr
arycontai
nedinanyother
l
awf orthet imebei
ngi nforce,
nofeesshallbepayabletot
heCent r
alGovernment,outofthe
assetsoft hebanki
ngcompany .
]

Whenhighcour
tappointacourtl
i
quidator,t
heCompani esActisappli
cati
ontoli
qui
datorswho
i
sappoint
edunderSecti
on38Aand39.Thel i
quidatorappoi
ntedinsuchcondi
ti
onwillhavet
he
samepowerposit
ionthatoft
heoffi
cial
liqui
datorforthepurposeofwindi
ngupprocessofa
banki
ngcompany.

2.
2St
ayofpr
oceedi
ngs

Notwi t
hstandi
nganythi
ngt
othecontr
arycont
ainedi
n202[secti
on466oft heCompani esAct,
1956( 1of1956)1,t
he203[
HighCourt
]shal
lnotmakeanyor derst
ayingtheproceedi
ngsi n
rel
ationtothewindi
ngupofabankingcompany,unl
esst
he203[ HighCourt]i
ssatisf
iedthatan
arr
angementhasbeenmadewher ebythecompanycanpayi tsdeposit
orsinful
lastheircl
aims
accrue.
I
nsimpl
ewor
di fcour
tfi
ndthatiti
snotbenef
ici
alt
othepeopl
eatl
argecour
tcanputast
ay
t
henonl
yonwindingupprocess.

Forthesamepur poset hel i

quidatorhavetosubmi tthepreli
mi naryr eportwithin2mont hsf rom
thedat eofwi ndingupor derbyt hecourtfort hesamegi vi
ngt hei nformat i
onr equi r
edbyt hat
sectionsof arasi tisav ail
abletohim andal sost atingtheamountofasset soft hebanki ng
companyi ncashwhi char einhiscustodyorunderhi scont r
olont hedat eoft her eportandt he
amountofi tsasset swhi char el
ikel
ytobecol lectedincashbef oret heexpiryoft hatper i
odof
twomont hsi nor derthatsuchasset smaybeappl iedspeedilytowar dsthemaki ngof
preferent
ialpay ment s,undersect i
on530oft hecompani esAct ,1956, andint hedi scharge,as
faraspossi ble,ofthel i
abi l
i
tiesandobli
gat ionsoft hebanki ngcompanyt oi t
sdeposi tor
sand
othercreditorsinaccor dancewi ththepr ovisionsher ei
naftercont ained;andt heof f
ici
al
l
iquidatorshal lmakef ort hepurposesaf oresaidev eryendeav ort ocol l
ectincashasmuchof
theassetsoft hebanki ngcompanyaspr acticable.

Thenaf ternoti
cetoprefer
enti
alcl
aimantsandsecur edandunsecuredcredit
orsshouldbe
servedWi t
hinf
if
teendaysfrom t
hedateoft hewi ndinguporderofabankingcompanyorwher e
thewi ndinguporderhasbeenmadebef oret hecommencementoft heBankingCompani es,
withi
nonemont hfrom suchcommencement ,theoffici
all
i
quidat
orshall
,forthepurposeof
maki nganest i
mateofthedebtsandliabil
it
iesoft hebankingcompany,bynot i
ceservedi
nsuch
mannerast heReserveBankmaydi r
ect,cal
l upon-

1.Asent
it
ledt
opr
efer
ent
ial
pay
ment

2.Ev
erysecur
edandev
eryunsecur
edcr
edi
tor

3.I
fcl
aimi
snotaskedi
naf
ixt
imel
i
mitt
heni
twi
l
lnotbeconsi
der
edaspr
efer
ent
ial
clai
ms

2.
3Bookeddeposi
tor
s'cr
edi
tst
obedeemedpr
oved

Inanypr oceedi
ngf ort
hewi ndi
ngupofabanki ngcompany ,ever
ydeposit
orofthebanki
ng
companyshal lbedeemedt ohav efil
edhisclai
mf ortheamountshowni nthebooksofthe
bankingcompanyasst andi
ngt ohiscredi
tand,notwit
hstandinganyt
hingtothecontr
ary
containedin208[secti
on474oft heCompani esAct,1956(1of1956)1, t
heHighCourtshal
l
presumesuchcl aimst ohavebeenpr oved,
unlesstheoffi
cialli
qui
dat
orshowst hatt
hereis
reasonf ordoubt
ingitscorr
ectness.
2.
4Pr
efer
ent
ial
pay
ment
stodeposi
tor
s

(1)I
nev er
yproceedingforthewindingupofabanki ngcompanywher eawi ndi
ngupor derhas
beenmade, whetherbeforeoraft
ert hecommencementoft heBanki
ngCompani es(Second
Amendment )Act,1960(37of1960) ,wi t
hinthreemonthsfrom thedateofthewindi
ngupor der
orwherethewindingupor derhasbeenmadebef oresuchcommencement ,wi
thi
nthreemont hs
ther
ef r
om, t
hepreferent
ialpaymentsr eferr
edt oi
nsecti
on530oft heCompani esAct,1956(1
of1956),i
nrespectofwhi chstat
ement sofclaimshavebeensentwi t
hinonemont hfrom t
he
dateoftheservi
ceoft henoticer
eferredt oinsect
ion41A,shallbemadebyt heoffi
cial
l
iquidat
ororadequatepr ovi
sionf
orsuchpay mentsshallbemadebyhi m.

(2)Af
tert
hepr
efer
enti
alpaymentsasaforesai
dhav
ebeenmadeoradequatepr
ovisi
onshas
beenmadeinr
espectt
hereof,
thereshal
lbepaidwi
thi
ntheaf
oresai
dper
iodoft
hreemonths;

(a)i
nthefi
rstpl
ace,t
oeverydeposi
tori
nthesavi
ngsbankaccountoft
hebankingcompanya
sum oftwohundredandf
if
tyrupeesorthebal
anceathi
scredi
t,whi
cheveri
sless;
and
ther
eaft
er

(b)inthenextplace,
toeveryotherdeposit
orofthebanki
ngcompanyasum oftwohundr
edand
fi
ftyrupeesorthebalanceathi
scr edi
t,whichev
erisl
ess,i
nprior
it
ytoal
lot
herdebt
sfr
om out
ofther emai
ningassetsofthebankingcompanyav ai
labl
eforpaymentt
ogener
alcr
edi
tor
s:

PROVIDEDthatthesum totaloft
heamount spaidundercl
ause(a)andclause(b)toanyone
personwhoinhisownname( andnotj
ointl
ywithanyotherper
son)isadepositorinthesavi
ngs
bankaccountofthebankingcompanyandal soadeposit
orinanyotheraccount,shal
lnot
exceedthesum oftwohundredandfif
tyrupees.

(3)Wher ewithi
ntheaf oresaidperiodoft hr
eemont hsfullpaymentcannotbemadeoft he
amount srequir
edt obepai dundercl ause(a)orclause(b)ofsub-sect
ion(2)withtheassetsin
cash,theoffi
ciall
iquidatorshallpaywi t
hinthatperi
odt oeverydeposi
torunderclause(a)or,
as
thecasemaybe, clause( b)ofthatsub-secti
ononapr or atabasissomuchoft heamountdue
tothedepositorundert hatclauseast heoffici
all
iqui
datorisabletopaywiththoseassets;and
shallpaytherestoft hatamountt oev erysuchdepositorasandwhensuf fi
cientassetsare
coll
ectedbytheof fici
alli
quidatorincash.
(4)Afterpay mentshavebeenmadef i
rsttodeposi t
orsinthesav ingsbankaccountandt hento
theotherdeposi t
orsinaccordancewiththef oregoingpr ovisi
ons, t
heremai ni
ngassetsoft he
bankingcompanyav ail
ableforpaymenttogener alcredi
torsshall beuti
li
zedf orpaymentona
proratabasi softhedebtsofthegeneral cr
editorsandoft hef ur
thersums, inany,duet othe
depositors;andaftermakingadequatepr ovi
sionf orpaymentonapr oratabasisasaf oresaidof
thedebt softhegeneralcredit
ors,
theoffici
al l
iquidatorshall,asandwhent heassetsoft he
companyar ecoll
ectedincash,makepay mentonapr oratabasisasaf oresaid,oft
hef urther
sums, ifany,whichmayr emainsduetot hedeposi t
orsreferredtoi ncl
ause( a)andclause( b)of
sub-section(2).

(5)Inordert
oenabletheoff
ici
all
iqui
datortohavei
nhiscust
odyorunderhi
scontr
oli
ncashas
muchoft heassetsofthebanki
ngcompanyaspossi bl
e,t
hesecur
it
iesgi
ventoev
erysecur
ed
credit
ormayber edeemedbytheoffi
ciall
i
quidat
or:

(a)Wheretheamountduet
othecredi
torismor
ethantheval
ueofthesecur
it
iesasassessed
byhim,or,
asthecasemaybe,asassessedbyt
heoffi
cial
li
qui
dat
or,onpaymentofsuchv al
ue;
and

(b)wheretheamountduetot
hecredi
tori
sequal
toorl
esst
hant
hev
alueoft
hesecur
it
iesasso
assessed,
onpaymentoftheamountdue:

PROVIDEDthatwher
etheoff
ici
all
i
quidat
ori
snotsat
isfi
edwitht
hev
aluat
ionmadebyt
he
cr
edi
tor,hemayappl
ytotheHighCourtf
ormaki
ngav al
uat
ion.

(6)Whenanyclai
mant,cr
editorordepositortowhom anypaymentist
obemadei naccordance
with210[
thepr
ovisi
onsofthissecti
on],cannotbefoundorisnotr
eadi
lyt
raceabl
e,adequat
e
provi
si
onshall
bemadebyt heoffi
cial
li
qui dat
orf
orsuchpay ment
.

(7)Fort
hepur
posesoft
hissect
ion,t
hepayment
sspeci
fi
edi
neachoft
hef
oll
owi
ngcl
auseshal
l
betreat
edaspay
mentsofadiff
erentcl
ass,
namel
y:
-

(a)pay
ment
stopr
efer
ent
ial
clai
mant
sundersect
ion530oft
heCompani
esAct
,1956(
1of
1956);
]
(
b)pay
ment
sundercl
ause(
a)ofsub-
sect
ion(
2)oft
hedeposi
tor
sint
hesav
ingsbankaccount
;

(
c)pay
ment
sundercl
ause(
b)ofsub-
sect
ion(
2)t
otheot
herdeposi
tor
s;

(d)paymentt
othegeneral
credit
orsandpaymentstothedeposi
tor
sinaddi
ti
ont
othose
specif
iedi
ncl
ause(a)andclause(b)ofsub-
sect
ion(2)
.

(
8)Thepaymentsofeachdif
ferentclassspeci
fi
edinsub-sect
ion(7)shal
lrankequal
lyamong
t
hemselv
esandbepaidinfullunlesstheasset
sareinsuf
fici
enttomeetthem, i
nwhichcase
t
heyshal
labat
einequalpr
opor t
ion.]

211[
(9)Nothi
ngcontainedinsub-
secti
ons(2),(3)
,(4),(
7)and(8)shal
lappl
ytoabanking
companyinrespectofthedeposi
tor
sofwhi chtheDepositInsur
anceCorpor
ati
oni
sliabl
eunder
sect
ion'
16oftheDepositInsur
anceCorpor
at i
onAct ,
1961(47of1961).

(10)Afterpref
erential
payment srefer
redt oi
nsub-secti
on(
1)hav ebeenmadeoradequat e
provisi
onhasbeenmadei nrespectthereof,
theremaini
ngassetsofthebankingcompany
referr
edtoinsub- sect
ion(9)avail
ableforpaymenttogeneralcr
edit
orsshall
beut i
li
zedfor
pay mentonpror atabasisofthedebt softhegeneralcr
edi
tor
sandoft hesumsduet ot
he
depositors:

PROVIDEDt hatwhereanyamountinrespectofanydeposi
tistobepai
dbytheli
quidat
ort
ot he
Deposi
tInsuranceCorporat
ionundersecti
on21oftheDepositI
nsur
anceCorpor
ati
onAct,1961
(47of1961),onlyt
hebalance,i
fany,l
eftaft
ermaki
ngthesaidpaymentshal
lbepayabl
etothe
deposi
tor.
]

Vol
unt
aryandspeedywi
ndi
ngup

3.
1Hi
ghCour
thassomepoweri
npr
ocessofv
olunt
arywi
ndi
ngup

Fort
hepurposeofv
oluntar
ywindi
ngupthebanki
ngcompanyhast ogetal
ett
er/cert
if
icat
e
fr
om ther
eserv
ebank,t
hatthecompanyisabl
etopayall
t hei
rdebtstoi
tscr
edit
orsandcourt
canal
sokeepsuper
visi
ononsuchbankingcompanyi
fitthinkfi
t.
3.
2Speedydi
sposal
ofwi
ndi
ngupf
orbanki
ngcompany

Fr
om S.44At
o44Xdeal
wit
hthi
saspect

IncaseofBaidy
anat
hBay arv.Ber
hamporebankLtd.i
twashel
dt hatHi
ghcour
thasexcl
usi
ve
j
urisdi
cti
onfort
hewindingupofbankingcompany
.Themainobjectoft
hisj
uri
sdi
cti
onis
speedyreal
i
zati
onofclaimsofthebank

Insuchcondi t
ionofwi ndi
ngupt heSummar ypr oceedingst akeplaceandnott hegener
al
proceedi
ng.[S.45B-TheHi ghCourtshall
,saveasot herwiseexpr esslypr
ov i
dedinsect
ion45C,
haveexclusivejuri
sdictiontoenter
tainanddecideanycl ai
m madebyoragai nstabanking
companywhi chi sbei ngwoundup( i
ncl
udingclaimsbyoragai nstanyofi t
sbranchesinIndia)
oranyapplicati
onmadeunder236[ secti
on391oft heCompani esAct ,1956(1of1956)]byori n
respectofabanki ngcompanyoranyquest i
onofpr iorit
iesoranyot herquesti
onwhatsoever,
whetheroflaworf act,whichmayr el
atetoorarisei nthecour seoft hewindingupofabanki ng
company ,whethersuchcl ai
m orquesti
onhasar i
senorar isesorsuchappl i
cati
onhasbeen
madeori smadebef oreoraftert
hedateoft heorderf orthewi ndingupoft hebankingcompany
orbeforeoraf t
erthecommencementoft heBanki ngCompani es(Amendment )Act
,1953( 52of
1953)]

Insomecondi tioncourtcanal soorderforsaleofdebtor’sproperty

, underSecti
on45D( 7)–[ At
thetimeofset t
lingthelistofdebtorsoratanyot herti
mepr iororsubsequentt her
eto,theHigh
Courtshallhavepowert opassanyor derinrespectofadebt oront heapplicati
onoftheof f
icial
l
iquidat
orforther eali
zat i
on,management ,pr
otecti
on,preservati
onorsal eofanypr opert
ygiven
assecurit
yt othebanki ngcompanyandt ogi
vesuchpower stotheof fi
ciall
iqui
dat
ort ocarr
y
outtheaforesaiddirectionsastheHi ghCourtthi
nksf i
t.
]Thiswashel dinthecaseofHanuman
BankLtdv .P.T.MuniaSer vai
.Thisisonlydonewhendebt orisnotpay ingdebtduringthe
processandt hisdoneaf t
erserv
inghi m aval
idnotice.

3.
3Ev
idenceofbanki
ngt
ransact
ions

(1)Entr
iesinthebooksofaccountorot herdocument sofabanki ngcompanywhi chisbeing
woundupshal l beadmitt
edinev i
denceinal l
239[l
egalproceedi
ngs]andal lsuchentriesmaybe
provedeit
herbyt heproducti
onoft hebooksofaccountorot herdocument softhebanki ng
companycont ainingsuchentr
iesorbythepr oducti
onofacopyoft heentri
es,certi
fi
edbyt he
offi
cial
li
quidatorunderhissi
gnatureandst ati
ngthati
tisat r
uecopyoft heor i
ginalentr
iesand
thatsuchorigi
nal ent
ri
esarecontainedinthebooksofaccountorot herdocument softhe
banki
ngcompanyi
nhi
spossessi
on.

(2)Notwithst
andingany t
hingtot hecont
r ar
ycont
ainedintheIndianEvidenceAct,1872(1of
1872),all
suchent ri
esinthebooksofaccountorot herdocument sofabanki ngcompanyshall,
asagainsttheDirector
s216[ off
icersandotheremployees]ofthebankingcompanyi nrespect
ofwhicht hewindingupor derhasbeenmade240[ *** ]
,beprimaf aci
eev i
denceofthetruthof
allmatter
spurportingt
obet her
einrecorded.

Hi
dequot
edt
ext

-
--
--
--
--
-For
war
dedmessage-
--
--
--
--

Fr
om:
Sthi
taPr
ajnaMohant
y<st
hit
amohant
y@kl
s.ac.
in>

Dat
e:Thu,
24Oct
,2019,
8:40AM

Subj
ect
:Wi
ndi
ngupofbanks

To:
rahul
raj
<rahul
raj
211997@gmai
l
.com>

2.
1Wi
ndi
ngupbyHi
ghCour
t

Fort
heprocessofwindi
ngupS.391,S.392,
S.433andS.583i
snotappli
cabl
eforbanki
ng
company.AsperS.37(1)oft
heBankingRegulat
ionActt
heHighcour
tcanorderforwi
ndi
ngup
ofabankingcompanyonbasi
soffol
lowingconditi
ons

1.I
fthebanki
ngcompanyi
sunabl
etopayi
tsdebt
s;or

2.I
fanappli
cat
ionf
ori
tswi
ndi
nguphasbeenmadebyt
heReser
veBankundersect
ion37or
thi
ssect
ion.

TheReserv
eBankcanalsomakeanappl
i
cat
ionundersect
ion38forthewindi
ngupofa
banki
ngcompanyi
fiti
sdirect
edsot
odobyanorderundercl
ause(b)ofsub-
sect
ion(
4)of
sect
ion35.
TheReser
veBankmaymakeanappl
i
cat
ionundert
hissect
ionf
ort
hewi
ndi
ngupofabanki
ng
company-

Ifthebankingcompanyhasf ai
ledt
ocompl ywiththerequir
ementsspecif
iedinsecti
on11; or
hasbyr easonoftheprovi
sionsofsecti
on22becomedi senti
tl
edtocarr
yonbanki ngbusinessin
India;orhasbeenprohi
bit
edf r
om r
eceivi
ngfreshdepositsbyanorderunderclause(
a)ofsub-
sect i
on(4)ofsect
ion35orunderclause(b)ofsub-sect
ion(3A)orsect
ion42oft heReserve
BankofI ndia,
Act,
1934.

I
fthecompanyhasfail
edtocomplywithanyrequir
ementoftheActothert
hanthe
r
equir
ementslai
ddowni nsect
ion11,
hascont i
nuedsuchfai
l
ure,af
ternoti
cei
nwriti
ngofsuch
f
ail
ureorcont
ravent
ionhasbeenconveyedt
ot hebanki
ngcompany .

Whenhighcour
tor
derf
orwi
ndi
ngupal
i
qui
dat
ori
sappoi
ntedbyt
hecour
tunderS.
38Awhi
chi
s
asf
oll
ow

(1)Ther
eshallbeat
tachedtoever
yHighCourtacour tl
iqui
datortobeappoi
ntedbytheCentr
al
Governmentfort
hepurposeofconducti
ngall
proceedingsforthewindi
ngupofbanking
companiesandperf
ormingsuchotherduti
esinr
eferencetheretoastheHi
ghCourtmayi mpose.

(2)Wher ehavingregardtothenumberofbankingcompanieswoundupandot her

cir
cumst ancesofthecase, t
heCent r
alGover
nmentisofopini
onthati
tisnotnecessaryor
expedienttoattachfortheti
mebei ngacourtli
qui
datort
oaHighCourt,i
tmay ,
from ti
met o
ti
me, bynotif
icati
onintheOf f
ici
alGazett
e,di
rectt
hatthi
ssect
ionshal
lnothaveeffectin
rel
ati
ont othatHighCour t
.]

39.Reser
veBankt
obeof
fi
cial
li
qui
dat
or

(1)Notwi
thstandi
ngany thi
ngcontainedinsection38AofthisActorinsecti
on448orsect ion
449oftheCompani esAct ,
1956( 1of1956),wher einanyproceedi
ngforthewindingupbyt he
HighCourtofabanki ngcompany ,anappli
cati
oni smadebyt heReserv
eBanki nthisbehal f,
the
Reserv
eBank, theStateBankofI ndiaoranyot herbanknoti
fiedbytheCentral
Gov ernmenti n
thi
sbehalforanyindiv i
dualasstatedinsuchappl i
cati
onshallbeappoi
ntedast heoff i
cial
l
iqui
datorofthebanki ngcompanyi nsuchproceedingandtheliqui
dat
or,i
fany,functioningin
suchpr
oceedi
ngshal
lvacat
eof
fi
ceuponsuchappoi
ntment
.

(2)Subjecttosuchdirect
ionsasmaybemadebyt heHighCourt,t
heremunerationofthe
offi
cial
liquidat
orappoint
edunderthissecti
on,thecostandexpensesofhisestabli
shmentand
thecostandexpensesoft hewindi
ngupshal l
bemetoutoft heassetsofthebankingcompany
whichisbei ngwoundup, andnotwit
hstandi
ngany t
hingtothecontr
arycontai
nedinanyother
l
awf orthet imebei
ngi nforce,
nofeesshallbepayabletot
heCent r
alGovernment,outofthe
assetsoft hebanki
ngcompany .
]

Whenhighcour
tappointacourtl
i
quidator,t
heCompani esActisappli
cati
ontoli
qui
datorswho
i
sappoint
edunderSecti
on38Aand39.Thel i
quidatorappoi
ntedinsuchcondi
ti
onwillhavet
he
samepowerposit
ionthatoft
heoffi
cial
liqui
datorforthepurposeofwindi
ngupprocessofa
banki
ngcompany.

2.
2St
ayofpr
oceedi
ngs

Notwi t
hstandi
nganythi
ngt
othecontr
arycont
ainedi
n202[secti
on466oft heCompani esAct,
1956( 1of1956)1,t
he203[
HighCourt
]shal
lnotmakeanyor derst
ayingtheproceedi
ngsi n
rel
ationtothewindi
ngupofabankingcompany,unl
esst
he203[ HighCourt]i
ssatisf
iedthatan
arr
angementhasbeenmadewher ebythecompanycanpayi tsdeposit
orsinful
lastheircl
aims
accrue.

I
nsimpl
ewor
di fcour
tfi
ndthatiti
snotbenef
ici
alt
othepeopl
eatl
argecour
tcanputast
ay
t
henonl
yonwindingupprocess.

Forthesamepur poset hel i

quidatorhavetosubmi tthepreli
mi naryr eportwithin2mont hsf rom
thedat eofwi ndingupor derbyt hecourtfort hesamegi vi
ngt hei nformat i
onr equi r
edbyt hat
sectionsof arasi tisav ail
abletohim andal sost at
ingtheamountofasset soft hebanki ng
companyi ncashwhi char einhiscustodyorunderhi scont r
olont hedat eoft her eportandt he
amountofi tsasset swhi char el
ikel
ytobecol lect
edincashbef oret heexpiryoft hatper i
odof
twomont hsi nor derthatsuchasset smaybeappl iedspeedilytowar dsthemaki ngof
preferent
ialpay ment s,undersect i
on530oft hecompani esAct ,1956, andint hedi scharge,as
faraspossi ble,ofthel i
abi l
i
tiesandobli
gat ionsoft hebankingcompanyt oi t
sdeposi tor
sand
othercreditorsinaccor dancewi ththepr ovisi
onsher ei
naftercont ained;andt heof f
ici
al
l
iquidatorshal l
makef ort hepurposesaf oresaideveryendeav ort ocol l
ectincashasmuchof
t
heasset
soft
hebanki
ngcompanyaspr
act
icabl
e.

Thenaf ternoti
cetoprefer
enti
alcl
aimantsandsecur edandunsecuredcredit
orsshouldbe
servedWi t
hinf
if
teendaysfrom t
hedateoft hewi ndinguporderofabankingcompanyorwher e
thewi ndinguporderhasbeenmadebef oret hecommencementoft heBankingCompani es,
withi
nonemont hfrom suchcommencement ,theoffici
all
i
quidat
orshall
,forthepurposeof
maki nganest i
mateofthedebtsandliabil
it
iesoft hebankingcompany,bynot i
ceservedi
nsuch
mannerast heReserveBankmaydi r
ect,cal
l upon-

1.Asent
it
ledt
opr
efer
ent
ial
pay
ment

2.Ev
erysecur
edandev
eryunsecur
edcr
edi
tor

3.I
fcl
aimi
snotaskedi
naf
ixt
imel
i
mitt
heni
twi
l
lnotbeconsi
der
edaspr
efer
ent
ial
clai
ms

2.
3Bookeddeposi
tor
s'cr
edi
tst
obedeemedpr
oved

Inanypr oceedi
ngf ort
hewi ndi
ngupofabanki ngcompany ,ever
ydeposit
orofthebanki
ng
companyshal lbedeemedt ohav efil
edhisclai
mf ortheamountshowni nthebooksofthe
bankingcompanyasst andi
ngt ohiscredi
tand,notwit
hstandinganyt
hingtothecontr
ary
containedin208[secti
on474oft heCompani esAct,1956(1of1956)1, t
heHighCourtshal
l
presumesuchcl aimst ohavebeenpr oved,
unlesstheoffi
cialli
qui
dat
orshowst hatt
hereis
reasonf ordoubt
ingitscorr
ectness.

2.
4Pr
efer
ent
ial
pay
ment
stodeposi
tor
s

(1)I
nev er
yproceedingforthewindingupofabanki ngcompanywher eawi ndi
ngupor derhas
beenmade, whetherbeforeoraft
ert hecommencementoft heBanki
ngCompani es(Second
Amendment )Act,1960(37of1960) ,wi t
hinthreemonthsfrom thedateofthewindi
ngupor der
orwherethewindingupor derhasbeenmadebef oresuchcommencement ,wi
thi
nthreemont hs
ther
ef r
om, t
hepreferent
ialpaymentsr eferr
edt oi
nsecti
on530oft heCompani esAct,1956(1
of1956),i
nrespectofwhi chstat
ement sofclaimshavebeensentwi t
hinonemont hfrom t
he
dateoftheservi
ceoft henoticer
eferredt oinsect
ion41A,shallbemadebyt heoffi
cial
l
iquidat
ororadequatepr ovi
sionf
orsuchpay mentsshallbemadebyhi m.

(2)Af
tert
hepr
efer
enti
alpaymentsasaforesai
dhav
ebeenmadeoradequatepr
ovisi
onshas
beenmadeinr
espectt
hereof,
thereshal
lbepaidwi
thi
ntheaf
oresai
dper
iodoft
hreemonths;
(a)i
nthefi
rstpl
ace,t
oeverydeposi
tori
nthesavi
ngsbankaccountoft
hebankingcompanya
sum oftwohundredandf
if
tyrupeesorthebal
anceathi
scredi
t,whi
cheveri
sless;
and
ther
eaft
er

(b)inthenextplace,
toeveryotherdeposit
orofthebanki
ngcompanyasum oftwohundr
edand
fi
ftyrupeesorthebalanceathi
scr edi
t,whichev
erisl
ess,i
nprior
it
ytoal
lot
herdebt
sfr
om out
ofther emai
ningassetsofthebankingcompanyav ai
labl
eforpaymentt
ogener
alcr
edi
tor
s:

PROVIDEDthatthesum totaloft
heamount spaidundercl
ause(a)andclause(b)toanyone
personwhoinhisownname( andnotj
ointl
ywithanyotherper
son)isadepositorinthesavi
ngs
bankaccountofthebankingcompanyandal soadeposit
orinanyotheraccount,shal
lnot
exceedthesum oftwohundredandfif
tyrupees.

(3)Wher ewithi
ntheaf oresaidperiodoft hr
eemont hsfullpaymentcannotbemadeoft he
amount srequir
edt obepai dundercl ause(a)orclause(b)ofsub-sect
ion(2)withtheassetsin
cash,theoffi
ciall
iquidatorshallpaywi t
hinthatperi
odt oeverydeposi
torunderclause(a)or,
as
thecasemaybe, clause( b)ofthatsub-secti
ononapr or atabasissomuchoft heamountdue
tothedepositorundert hatclauseast heoffici
all
iqui
datorisabletopaywiththoseassets;and
shallpaytherestoft hatamountt oev erysuchdepositorasandwhensuf fi
cientassetsare
coll
ectedbytheof fici
alli
quidatorincash.

(4)Afterpay mentshavebeenmadef i
rsttodeposi t
orsinthesav ingsbankaccountandt hento
theotherdeposi t
orsinaccordancewiththef oregoingpr ovisi
ons, t
heremai ni
ngassetsoft he
bankingcompanyav ail
ableforpaymenttogener alcredi
torsshall beuti
li
zedf orpaymentona
proratabasi softhedebtsofthegeneral cr
editorsandoft hef ur
thersums, inany,duet othe
depositors;andaftermakingadequatepr ovi
sionf orpaymentonapr oratabasisasaf oresaidof
thedebt softhegeneralcredit
ors,
theoffici
al l
iquidatorshall,asandwhent heassetsoft he
companyar ecoll
ectedincash,makepay mentonapr oratabasisasaf oresaid,oft
hef urther
sums, ifany,whichmayr emainsduetot hedeposi t
orsreferredtoi ncl
ause( a)andclause( b)of
sub-section(2).

(
5)Inor
dertoenablet
heoff
ici
all
iqui
dat
ort
ohaveinhiscust
odyorunderhi
scontr
oli
ncashas
muchoftheasset
softhebanki
ngcompanyaspossi
ble,
thesecur
it
iesgi
ventoev
erysecur
ed
cr
edi
tormayber
edeemedbyt
heof
fi
cial
li
qui
dat
or:

(a)Wheretheamountduet
othecredi
torismor
ethantheval
ueofthesecur
it
iesasassessed
byhim,or,
asthecasemaybe,asassessedbyt
heoffi
cial
li
qui
dat
or,onpaymentofsuchv al
ue;
and

(b)wheretheamountduetot
hecredi
tori
sequal
toorl
esst
hant
hev
alueoft
hesecur
it
iesasso
assessed,
onpaymentoftheamountdue:

PROVIDEDthatwher
etheoff
ici
all
i
quidat
ori
snotsat
isfi
edwitht
hev
aluat
ionmadebyt
he
cr
edi
tor,hemayappl
ytotheHighCourtf
ormaki
ngav al
uat
ion.

(6)Whenanyclai
mant,cr
editorordepositortowhom anypaymentist
obemadei naccordance
with210[
thepr
ovisi
onsofthissecti
on],cannotbefoundorisnotr
eadi
lyt
raceabl
e,adequat
e
provi
si
onshall
bemadebyt heoffi
cial
li
qui dat
orf
orsuchpay ment
.

(7)Fort
hepur
posesoft
hissect
ion,t
hepayment
sspeci
fi
edi
neachoft
hef
oll
owi
ngcl
auseshal
l
betreat
edaspay
mentsofadiff
erentcl
ass,
namel
y:
-

(a)pay
ment
stopr
efer
ent
ial
clai
mant
sundersect
ion530oft
heCompani
esAct
,1956(
1of
1956);
]

(
b)pay
ment
sundercl
ause(
a)ofsub-
sect
ion(
2)oft
hedeposi
tor
sint
hesav
ingsbankaccount
;

(
c)pay
ment
sundercl
ause(
b)ofsub-
sect
ion(
2)t
otheot
herdeposi
tor
s;

(d)paymentt
othegeneral
credit
orsandpaymentstothedeposi
tor
sinaddi
ti
ont
othose
specif
iedi
ncl
ause(a)andclause(b)ofsub-
sect
ion(2)
.

(
8)Thepaymentsofeachdif
ferentclassspeci
fi
edinsub-sect
ion(7)shal
lrankequal
lyamong
t
hemselv
esandbepaidinfullunlesstheasset
sareinsuf
fici
enttomeetthem, i
nwhichcase
t
heyshal
labat
einequalpr
opor t
ion.]
211[
(9)Nothi
ngcontainedinsub-
secti
ons(2),(3)
,(4),(
7)and(8)shal
lappl
ytoabanking
companyinrespectofthedeposi
tor
sofwhi chtheDepositInsur
anceCorpor
ati
oni
sliabl
eunder
sect
ion'
16oftheDepositInsur
anceCorpor
at i
onAct ,
1961(47of1961).

(10)Afterpref
erential
payment srefer
redt oi
nsub-secti
on(
1)hav ebeenmadeoradequat e
provisi
onhasbeenmadei nrespectthereof,
theremaini
ngassetsofthebankingcompany
referr
edtoinsub- sect
ion(9)avail
ableforpaymenttogeneralcr
edit
orsshall
beut i
li
zedfor
pay mentonpror atabasisofthedebt softhegeneralcr
edi
tor
sandoft hesumsduet ot
he
depositors:

PROVIDEDt hatwhereanyamountinrespectofanydeposi
tistobepai
dbytheli
quidat
ort
ot he
Deposi
tInsuranceCorporat
ionundersecti
on21oftheDepositI
nsur
anceCorpor
ati
onAct,1961
(47of1961),onlyt
hebalance,i
fany,l
eftaft
ermaki
ngthesaidpaymentshal
lbepayabl
etothe
deposi
tor.
]

Vol
unt
aryandspeedywi
ndi
ngup

3.
1Hi
ghCour
thassomepoweri
npr
ocessofv
olunt
arywi
ndi
ngup

Fort
hepurposeofv
oluntar
ywindi
ngupthebanki
ngcompanyhast ogetal
ett
er/cert
if
icat
e
fr
om ther
eserv
ebank,t
hatthecompanyisabl
etopayall
t hei
rdebtstoi
tscr
edit
orsandcourt
canal
sokeepsuper
visi
ononsuchbankingcompanyi
fitthinkfi
t.

3.
2Speedydi
sposal
ofwi
ndi
ngupf
orbanki
ngcompany

Fr
om S.44At
o44Xdeal
wit
hthi
saspect

IncaseofBaidy
anat
hBay arv.Ber
hamporebankLtd.i
twashel
dt hatHi
ghcour
thasexcl
usi
ve
j
urisdi
cti
onfort
hewindingupofbankingcompany
.Themainobjectoft
hisj
uri
sdi
cti
onis
speedyreal
i
zati
onofclaimsofthebank

Insuchconditi
onofwindingupt
heSummar ypr oceedi
ngstakepl
aceandnotthegener
al
proceedi
ng.[S.45B-TheHighCour
tshall
,saveasot her
wiseexpressl
ypr
ovi
dedinsect
ion45C,
haveexclusi
vejuri
sdi
cti
ontoent
ert
ainanddecideanycl ai
m madebyoragai
nstabanking
companywhi chisbei
ngwoundup( i
ncl
udingclaimsbyoragainstanyofi
tsbr
anchesinIndi
a)
oranyapplicat
ionmadeunder236[ secti
on391oft heCompani esAct,1956(1of1956)]byorin
respectofabankingcompanyoranyquest ionofpr ior
it
iesoranyot herquesti
onwhatsoever
,
whetheroflaworf act,
whi
chmayr el
atetoorarisei nt
hecour seofthewindingupofabanking
company ,whethersuchcl
aim orquesti
onhasar isenorarisesorsuchappl i
cati
onhasbeen
madeori smadebef or
eoraft
erthedateoft heorderforthewi ndi
ngupoft hebankingcompany
orbeforeorafterthecommencementoft heBanki ngCompani es(
Amendment )Act
,1953(52of
1953)]

Insomecondi tioncourtcanal soorderforsaleofdebtor’sproperty

, underSecti
on45D( 7)–[ At
thetimeofset t
lingthelistofdebtorsoratanyot herti
mepr iororsubsequentt her
eto,theHigh
Courtshallhavepowert opassanyor derinrespectofadebt oront heapplicati
onoftheof f
icial
l
iquidat
orforther eali
zat i
on,management ,pr
otecti
on,preservati
onorsal eofanypr opert
ygiven
assecurit
yt othebanki ngcompanyandt ogi
vesuchpower stotheof fi
ciall
iqui
dat
ort ocarr
y
outtheaforesaiddirectionsastheHi ghCourtthi
nksf i
t.
]Thiswashel dinthecaseofHanuman
BankLtdv .P.T.MuniaSer vai
.Thisisonlydonewhendebt orisnotpay ingdebtduringthe
processandt hisdoneaf t
erserv
inghi m aval
idnotice.

3.
3Ev
idenceofbanki
ngt
ransact
ions

(1)Entr
iesinthebooksofaccountorot herdocument sofabanki ngcompanywhi chisbeing
woundupshal l beadmitt
edinev i
denceinal l
239[l
egalproceedi
ngs]andal lsuchentriesmaybe
provedeit
herbyt heproducti
onoft hebooksofaccountorot herdocument softhebanki ng
companycont ainingsuchentr
iesorbythepr oducti
onofacopyoft heentri
es,certi
fi
edbyt he
offi
cial
li
quidatorunderhissi
gnatureandst ati
ngthati
tisat r
uecopyoft heor i
ginalentr
iesand
thatsuchorigi
nal ent
ri
esarecontainedinthebooksofaccountorot herdocument softhe
bankingcompanyi nhi
spossession.

(2)Notwithst
andingany t
hingtot hecont
r ar
ycont
ainedintheIndianEvidenceAct,1872(1of
1872),all
suchent ri
esinthebooksofaccountorot herdocument sofabanki ngcompanyshall,
asagainsttheDirector
s216[ off
icersandotheremployees]ofthebankingcompanyi nrespect
ofwhicht hewindingupor derhasbeenmade240[ *** ]
,beprimaf aci
eev i
denceofthetruthof
allmatter
spurportingt
obet her
einrecorded.