9911796707
|
Home
Issues:
Jurisdiction of the High Court under the Banking Companies Act in settling the list of debtors of a banking company working under a scheme of arrangement. Analysis: The judgment addressed the common question of law regarding the jurisdiction of the High Court under the Banking Companies Act in settling the list of debtors of a banking company operating under a scheme of arrangement. The petitioner, a bank, sought permission to settle the list of debtors under sections 45M and 45D of the Banking Companies Act. The respondents challenged the court's jurisdiction, arguing that the bank, functioning under a scheme, cannot be considered as "being wound up." The court examined sections 45D, 45K, and 45M of the Banking Companies Act to interpret the legislative intent. It noted that the omission of section 45K did not diminish the High Court's powers under section 392 of the Companies Act to supervise arrangements, including those of banking companies. The court rejected the argument that section 45M applied only to banking companies under section 391 of the Companies Act, emphasizing the broader application of the Companies Act's provisions to all companies, including banking companies. The judgment also delved into the nature of schemes of arrangement and liquidation. The court analyzed precedents and statutory provisions to determine that a scheme of arrangement is distinct from liquidation and cannot be equated as an alternative mode of winding up. It highlighted the specific provisions in the Companies Act related to arbitration, compromises, arrangements, and reconstruction, emphasizing that schemes offer an alternative to liquidation, not a mode of liquidation itself. The court dismissed the contention that a scheme of arrangement should be treated as a form of liquidation, citing previous rulings and statutory interpretations that clarified the differences between the two processes. Furthermore, the judgment affirmed the High Court's jurisdiction to entertain the petition and make necessary orders based on the provisions of section 392 of the Companies Act in conjunction with section 391. It emphasized the court's authority to transfer proceedings from subordinate courts, reinforcing its jurisdiction under extraordinary civil powers. Ultimately, the court dismissed the objections raised by the respondents, asserting the court's jurisdiction to proceed with the cases on their merits and schedule evidence recording accordingly.
|
