9911796707
TMI Blog2015 (7) TMI 1389X X X X Extracts X X X X X X X X Extracts X X X X ..... on given by the learned Single Judge as well as by the Division Bench of the High Court in the aforestated writ appeal affects the appellant adversely and therefore, the appellant had submitted an application for permission to file the Special Leave Petition against the aforestated judgment. Permission was granted to the present appellant and therefore, this appeal. 3. The appellant is Deposit Insurance and Credit Guarantee Corporation (hereinafter referred to as 'the Corporation'). The function of the Corporation is to insure deposits made by depositors with the banking companies and the said Corporation has been constituted under the provisions of Section 3(1) of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (hereinafter referred to as 'the Act'). The Act had been enacted with a very laudable purpose. Normally a person deposits his savings or invests his money by way of a saving bank account or a fixed deposit with banking companies, including cooperative banks, without taking much care of ascertaining financial condition of the bank, possibly because of the trust reposed by him in the Reserve Bank of India, which regulates the banking business in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said bank was Rs. 1 lakh and therefore, every depositor was paid the amount of deposit or a sum of Rs. 1 lakh, whichever was less. 10. Though the aforestated amount had been released by the Corporation, all the depositors could not be paid the entire amount they had deposited with the bank because the amount insured in respect of each depositor was only Rs. 1 lakh. So, those who had deposited more than one lakh rupees with the bank, were not paid the amount to the extent to which their deposits exceeded Rs. 1 lakh. 11. In the aforestated background, Writ Petition Nos.6768 and 7372 of 2005 had been filed in the Madurai Bench of the Madras High Court by some of the depositors praying that the amount which had remained unpaid on their fixed deposits be directed to be paid to them by the Joint Registrar of the Co-operative Societies, who had been appointed as the Official Liquidator. In the said petitions, the aforestated officer, i.e. the Official Liquidator as well as the Special Officer, Theni Co-operative Urban Bank Ltd. were impleaded as respondents. After hearing the concerned parties, by an order dated 27th July, 2005, the learned Single Judge was pleased to direct the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Banking Regulations Act, 1949, so as to establish the case of the Corporation to the effect that after payment by the Corporation to the depositors to the extent to which the deposits had been guaranteed, the surplus should be put at the disposal of the Corporation subject to the provision of Section 21 of the Act. Till the said surplus is paid to the Corporation, subject to the provisions regarding making payment of winding up expenditure, dividend to be paid as per the provisions of Section 21 of the Act, the depositors could not have been given any further amount. Any payment to depositors at that stage would be contrary to the provisions of the Act and by virtue of the orders passed by the High Court, the Official Liquidator was directed to act contrary to the provisions of the Act. 15. It had been submitted by the learned counsel that the High Court did not consider any of the provisions of the Act or the provisions of the Banking Regulations Act, 1949 before passing the impugned order. According to him, once each depositor is paid the amount deposited or Rs. 1 lakh, whichever is less, the Official Liquidator of the Bank should have given the amount to the Corporation as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by they have been directed to pay the unpaid amount to the depositors instead of paying the same to the Corporation. 20. The object with which the Act has been enacted has been stated hereinabove in a nutshell. The object was to insure the depositors so that they may not have to stand in a queue before the Official Liquidator for every paisa deposited by them with the concerned bank. As on today, as per the provisions of Section 16(1) of the Act, a sum of Rs. 1 lakh is being insured or guaranteed in respect of each depositor. So a depositor is safe and he has not to wash his hands off his deposit if the amount deposited by him is less than Rs. 1 lakh. The Official Liquidator, as per the provisions of the Act, has to give details about the depositors and the amount deposited by them in a prescribed form within three months from the date on which the liquidation order is passed or from the day on which he takes charge, whichever is later and within two months from the date on which the details are submitted to the Corporation, the Corporation has to make payment to the above extent either to the depositors directly or to them through the Official Liquidator. 21. Thus, as per the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the Corporation as it has been stated in the said sub-section, notwithstanding anything to the contrary contained in any other law for the time being in force. Thus, the Official Liquidator, as per clause 2(a) of Section 21 of the Act, has to repay the amount to the Corporation. 25. The aforestated Section 21 not only makes it obligatory on the part of the Official Liquidator to repay the said amount to the Corporation, but it also clarifies that there shall not be any other preferential creditor who would be getting any amount from the Official Liquidator till the amount payable under Section 21 of the Act is paid to the Corporation. 26. In view of the aforestated clear legal position, in our opinion, the High Court was not right when it directed the Official Liquidator to determine the mode of payment by ignoring the aforestated statutory provision. 27. The Corporation was not represented before the learned Single Judge, but at least before the Division Bench, the learned counsel appearing for the Official Liquidator had drawn attention of the Bench to the aforestated legal provisions of the Act. Moreover, provisions of Regulation 22 of the Deposit Insurance and Credit G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estated reason, we are of the view that the High Court had exceeded its authority while giving a direction to the Official Liquidator, which is not in consonance with the statutory provisions and therefore, we set aside the judgment and order delivered by the learned Single Judge as also by the Division Bench and direct the Official Liquidator and the Special Officer to act in accordance with the statutory provisions. 32. The appeal is, accordingly, allowed with no order as to costs. CIVIL APPEAL NOS.1116, 1923, 1924, 1925, 1926, 1927, 1928, 1929, 1930, 1931, 1932, 1934 AND 1935 OF 2009 33. So far as Appeal No.1116 of 2009 and similar matters are concerned, we record the fact that they have been filed at an interlocutory stage and therefore, the said appeals are disposed of with a direction to the High Court to decide the matters, which are pending before it, in the light of the law laid down hereinabove. CIVIL APPEAL NOS.5333, 5334, 5335, 5336 AND 5337-5339 OF 2012 34. In all the aforestated appeals, some compromise had been arrived at among the parties before the learned Single Judge, but the same had been challenged before the Division Bench. The Division Bench had quashed ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
