The question is whether the bank can claim exemption from insolvency proceedings under Section 8 of the Act. Any company registered under any enactment is exempted from the insolvency proceedings. The bank was registered as a banking company as defined under Section 5(c) of the Banking Regulation Act, 1949 (Act No. 10 of 1949), which reads as under:
"5(c) 'banking company' means any company which transacts the business of banking in India;" Clause (d) of Section 5 of the Act No. 10 of 1949 defines 'company' to mean any company as defined in Section 3 of the Companies Act, 1956; and includes a foreign company within the meaning of Section 591 of that Act. Section 2 of Act No. 10 of 1949 provides that the provisions of Act shall be in addition to, and not, save as hereinafter expressly provided, in derogation of the Companies Act, and any other law for the time being in force.
After the enforcement of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Act No. 5 of 1970), all the banking companies including the foreign companies registered under the Companies Act, 1959, were nationalised and more than 51 per cent shares were taken over by the Government of India and the banking companies became the body corporate under Section 2(d) of Act No. 5 of 1970. Clause (d) defines 'corresponding new bank in relation to existing bank' to mean a body corporate specified against such bank in column 2 of Schedule 1. In the First Schedule 'Punjab National Bank Ltd.' is in the first column and in the second column it has been referred to as 'Punjab National Bank'. Section 4 of 1970 Act provides that on commencement of the Act undertaking of every existing bank shall be transferred to and shall vest in the corresponding new bank.
In view of the aforesaid provision of law, Punjab National Bank is a Government company under Section 617 of the Companies Act. The view taken by the courts below that the bank is registered company and, therefore, it is exempted from insolvency proceedings--does not suffer from any illegality.
IN THE HIGH COURT OF ALLAHABAD
Civil Misc. Writ Petition No. 17526 of 2001
Decided On: 24.05.2001
Appellants: Nagendra Kumar Jain
Vs.
Respondent: District Judge, Moradabad
Vs.
Respondent: District Judge, Moradabad
Hon'ble Judges/Coram:
S.N. Agarwal, J.
S.N. Agarwal, J.
1. This writ petition is directed against the order dated 7-9-2000 passed by the respondent No. 2 rejecting the insolvency petition filed by the petitioner and the order of the appellate court dated 1-3-2001 affirming the said order in appeal.
2. Briefly stated, the facts are that Punjab National Bank, Branch: Station Road, Moradabad, the respondent No. 3, ('the Bank') filed Suit No. 717 of 1991 for recovery of amount against the petitioner as well as Shivalik International and others. The suit was decreed on 10-2-1992 for Rs. 20,72,000.
3. The petitioner filed an insolvency petition before the respondent No. 2 for declaring him insolvent with the allegation that Rs. 20,72,000 is due to Punjab National Bank. He has 1/72nd share in the house situated in Seohara Town, District Bijnor, the value of which is hardly Rs. 1,000 and his wearing clothes and other assets are valued at Rs. 2,000. The bank raised an objection that insolvency petition is not maintainable against the bank in view of Section 8 of the Provincial Insolvency Act, 1920 which reads as under:
"8. Exemption of corporations, etc., from insolvency proceedings.--No insolvency petition shall be presented against any corporation or against any association or company registered under any enactment for the time being in force."
4. The objection of the bank was accepted by the respondent No. 1 and insolvency petition was rejected by order dated 7-1-2001. The petitioner filed appeal against this order and the appellate court dismissed the appeal vide order dated 1-3-2001.
5. The question is whether the bank can claim exemption from insolvency proceedings under Section 8 of the Act. Any company registered under any enactment is exempted from the insolvency proceedings. The bank was registered as a banking company as defined under Section 5(c) of the Banking Regulation Act, 1949 (Act No. 10 of 1949), which reads as under:
"5(c) 'banking company' means any company which transacts the business of banking in India;"
6. Clause (d) of Section 5 of the Act No. 10 of 1949 defines 'company' to mean any company as defined in Section 3 of the Companies Act, 1956; and includes a foreign company within the meaning of Section 591 of that Act. Section 2 of Act No. 10 of 1949 provides that the provisions of Act shall be in addition to, and not, save as hereinafter expressly provided, in derogation of the Companies Act, and any other law for the time being in force.
7. After the enforcement of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Act No. 5 of 1970), all the banking companies including the foreign companies registered under the Companies Act, 1959, were nationalised and more than 51 per cent shares were taken over by the Government of India and the banking companies became the body corporate under Section 2(d) of Act No. 5 of 1970. Clause (d) defines 'corresponding new bank in relation to existing bank' to mean a body corporate specified against such bank in column 2 of Schedule 1. In the First Schedule 'Punjab National Bank Ltd.' is in the first column and in the second column it has been referred to as 'Punjab National Bank'. Section 4 of 1970 Act provides that on commencement of the Act undertaking of every existing bank shall be transferred to and shall vest in the corresponding new bank.
8. In view of the aforesaid provision of law, Punjab National Bank is a Government company under Section 617 of the Companies Act. The view taken by the courts below that the bank is registered company and, therefore, it is exempted from insolvency proceedings--does not suffer from any illegality.
9. The writ petition is, accordingly, dismissed.
10. Petition dismissed.
No comments:
Post a Comment