BANK OF CHINA Vs. STATE

JUDGEMENT

(1.) THIS is an application by the Reserve Bank of India, inter alia, for an order that the Bank of China be wound up by and under the directions of this court under the provisions of the Companies Act, 1956, and the Banking Companies Act, 1949. In the petition it is stated, inter alia, that, the entire shareholdings of the company are being held and controlled by the People's Republic of China and persons of Chinese nationality. The policy and administrative control of the company are in the hands of the Central People's Government of the People's Republic of China and persons of Chinese nationality. In the light of recent events, namely, the act of aggression committed by the People's Republic of China on Indian territories, which illegal acts are still continuing, the Reserve Bank is satisfied that the continuance of the company is prejudicial to the interests of the depositors and further that the carrying on of banking business by the company in India will not be in the public interests. On the 2nd November, 1962, the license granted to the Bank of China under the provisions of section 22 (1) of the Banking Companies act, 1949, was cancelled by the Reserve bank in terms of section 22 (4), inter alia, on the ground that the carrying on of banking business by the company in India is not in public interests. The Reserve Bank was further of opinion that the delay involved in giving the company an opportunity in terms of the proviso to section 22 (4) of the banking Companies Act, 1949, was prejudicial to the interests of the depositors of the company and the public.

(2.) THIS application has been made under section 38 (3) of the Banking companies Act, 1949, on the ground : (a) that in the opinion of the reserve Bank, the continuance of the Bank of China is prejudicial to the interests of its depositors, and (b) that by reason of the cancellation of license, the Bank of china has become disentitled to carry on banking business in India.

(3.) THE petition was admitted by P. B. Mukharji, J. , on the 2nd November, 1962. His Lordship, upon hearing the reserve Bank, was pleased to appoint the Official Liquidator as Provisional liquidator of the Bank of China. His lordship also gave directions, inter alia, as to advertisement of the petition and service of the petition at the principal office of the Bank of China. Pursuant to these directions, the winding up petition has been advertised in the 'statesman' of Calcutta on the 13th November, 1962; in 'jugantar' of calcutta on the 14th November, 1962, in the 'calcutta Gazette' on the 15th november, 1962; in 'maharashtra Times' of Bombay on the 16th November, 1962 in the 'gazette of India' on the 17th November, 1962; and in the 'times of India' of Bombay on the 20th November, 1962. The petition has also been served at the principal office of the Bank of China at Calcutta on the 3rd November, 1962 and there is an acknowledgement receipt given by one H. J. Puh, acting manager of the Bank in Calcutta.