Home Case Index All Cases Companies Law Companies Law + SC Companies Law - 1962 (3) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
1962 (3) TMI 78 - SUPREME COURTWhether ss. 38(1) and (3)(b)(iii) make it mandatory for the High Court to pass an order winding up a banking company whenever the Reserve Bank under its powers or under an order of the Central Government makes an application for the winding up of a banking company? Held that:- The Arbitration Act itself affords a readily available instance. Under that Act the Court passes its decree on an award of almost any one the parties may choose. Nor is the possibility of a mistake by the Reserve Bank of such vital consequence. If the Reserve Bank acts in good faith and with circumspection, there is as much or as little chance of error as before a Court of law. Lastly we do not think that this was a case in which some lesser action like moratorium or amalgamation or reconstruction would have been feasible. The difficulty of the Palai Bank was the nature of its advances, which were either not recoverable or not easily recoverable. A moratorium with the limitation of time involved in it would not have been an adequate measure, and amalgamation and reconstruction were out of question at the stage which had been reached. We are thus satisfied that ss. 38(1) and (3)(b)(iii) of the Banking Companies Act are neither discriminatory nor unreasonable, and cannot be declared void under Arts. 14 and 19 of the Constitution. Since the provisions are manifestly in the public interest, they cannot also be declared ultra vires under Art. 301, because they are protected by Art. 302 of the Constitution. The appeal and the petition thus fail, and are dismissed
|