DALIP SINGH Vs. FIRST NATIONAL BANK LTD

JUDGEMENT

(1.) In C. O. No. 128 of I950 and C. O. No. 136 of 1951 it is said that once it is established that a Banking Company is unable to pay its debts the Court has no power to sanction a scheme of arrangement under Section 153 of the Indian Companies Act, 1913, hereinafter referred to as the Act, in relation to the affairs of that Banking Company.

(2.) In arguments Counsel for the objectors rely upon the provisions of Section 38 (1) of the Banking Companies Act, 1949. Section 38 (1) reads:

(3.) Now, it is said that Section 38 (1) of the Banking Companies Act must be understood to have repealed the provisions of Section 153 of the Act. In my judgment this contention has no force. Section 56 of the Banking Companies Act read with the Second schedule to that Act shows that the only part of the Act which has been repealed by Act X of 1949 is Part X-A of the Act. Indeed, Section 45 of Act X of 1949 provided that the Court may sanction a compromise or arrangement between a banking company and its creditors or any class of them or between such company and its members or any class of them when the compromise or arrangement is certified by the Reserve Bank as not being detrimental to the interests of the depositors of that banking company. Clearly Act X of 1949 does not repeal Section 153 of the Act.