9911796707
TMI Blog2008 (9) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... the second respondent-bank as per sections 16 and 17 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961, to see that all the depositors of the bank receive their dues in full and also to restrain the second respondent-bank from making any repayment to the first respondent-Corporation. 2. It is not in dispute that the second respondent-bank was wound up vide orders of the Reserve Bank of India, dated 6-12-2004. Pursuant thereto, a Liquidator was appointed on 7-12-2004 by the Commissioner of Co-operative Societies and he assumed the charge on 8-12-2004. Aggrieved by the same, one of the shareholders of the second respondent-bank filed W. P. No. 23156 of 2004, seeking a mandamus to quash the proceedings of Reserve Bank of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repayment to the first respondent-Corporation till all the deposits of the bank receive their dues in full. 4 Separate counter-affidavits have been filed by respondent Nos. 1 and 2 denying the allegations made by the petitioner and stating that section 21(2)(a) of the Act 47 of 1961 mandates that the Liquidator shall repay to the first respondent the amounts claimed by it and, therefore, no mandamus can be issued compelling the respondents to act in contravention of section 21(2)(a) of the Act 47 of 1961. 5. I have heard learned counsel for both the parties in detail and perused the material on record. 6. The first respondent-Corporation is established under the Deposit Insurance and Credit Guarantee Corporation Act, 1961, for insuring d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Act and the Regulations made thereunder : "16. Liability of Corporation in respect of insured deposits.-(1) Where an order for the winding up or liquidation of an insured bank is made, the Corporation shall, subject to the other provisions of this Act, be liable to pay to every depositor of that bank in accordance with the provisions of section 17 an amount equal to the amount due to him in respect of the deposit in that bank at the time when such order is made : Provided that the liability of the Corporation in respect of an insured bank referred to in clause (a) or clause (b) of sub-section (1) of section 13 or clause (a) or clause (b ) of section 13 shall be limited to the deposits as on the date of the cancellation of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and other amounts in his hands, after making provision for expenses payable by that time, are sufficient to enable him to declare a dividend of not less than one paisa in the rupee to each depositor." 12. On a combined reading of the above provisions, it is clear that the liability of the Corporation to pay to every depositor arises once an order of winding up of the insured bank is made. 13. So far as repayment of the amount to the Corporation is concerned, section 21(2)(a) of the Act makes it clear that the Liquidator has to repay the Corporation out of the amounts payable by him in respect of any deposit in the manner prescribed. Regulation 22 provides such procedure stating that the amounts repayable to the Corporation shall be pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Corporation. 16. It is also relevant to note that the first respondent-Corporation while releasing Rs. 75.59 crores towards the insured claim made it clear in the covering letter addressed to the bank that the Corporation has right of repayment in preference over the claims of other creditors and as such whenever the amount of recovery after meeting the expenses exceeding 1 per cent of total deposit, the second respondent should remit the appropriate amount to the Corporation. The claim of the first respondent-Corporation being in terms of the statutory provisions cannot be held to be arbitrary or illegal on any ground whatsoever. 17. Similarly, the apprehension expressed by the petitioner-society that on account of repayment to the firs ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
