PALAI CENTRAL BANK Vs. JACOB P CHERIAN

JUDGEMENT

(1.) NINE hundred and twenty five claims brought under Section 45d of the Banking companies Act have been heard together on the common question whether the respondent debtors, whose borrowings from the banking company in liquidation were against their deposits with it, are entitled to set off the one against the other under Section 529 of the Companies Act read with Section 46 of the Provincial insolvency Act, the company being un-disputedly an Insolvent company. (Actually the insolvency law in force in this State is the (Kerala) insolvency Act, 1955 section 47 of which corresponds to Section 46 of the Provincial Insolvency Act. However the previsions of this Act are, for all material purposes, identical with those of the Provincial Insolvency Act, and it is more convenient to refer to the provisions of the latter Act.) Four of them, B. C. C. No. 194 of 1961, B. C. C. No. 408 of 1961, B. C. C. No. 1003 of 1961 and B. C. C. No. 1105 of 1961, have been chosen, more or less as test cases, on the understanding that the decision in them will govern the remaining cases; and, although all the cases have been heard, this order is in terms confined to these four cases.

(2.) (BOTH the borrowings from the bank and the deposits with it create debts, the one due to the bank and the other from the bank. For the sake of clarity I shall hereafter refer to the debts due to the bank as loans and to the debts due from the bank as deposits.)

(3.) THE company was ordered to be wound up on 5-12-1960 on a petition presented on 8-8-1960 on which date a provisional liquidator was appointed. The provisional liquidator was in charge until the winding-up order was made.