Deposit Insurance & Credit ... vs Ragupathi Ragavan & Ors

5. In the instant case, we are concerned with Theni Cooperative Urban Bank Ltd., doing its banking business mainly in District Theni of Tamil Nadu. The aforestated Bank, which had been registered as an insured bank with the Corporation on 1st July, 1980, was in financial difficulties and therefore, the Reserve Bank of India had cancelled its licence to do banking business under Section 22 of the Banking Regulations Act, 1949 on 23rd May, 2002. However, the said order cancelling the licence was kept in abeyance for a period of six months by an order dated 7th June, 2002.

11. In the aforestated background, Writ Petition Nos.6768 and 7372 of 2005 had been filed in the Madurai Bench of the Madras High Court by some of the depositors praying that the amount which had remained unpaid on their fixed deposits be directed to be paid to them by the Joint Registrar of the Co-operative Societies, who had been appointed as the Official Liquidator. In the said petitions, the aforestated officer, i.e. the Official Liquidator as well as the Special Officer, Theni Co-operative Urban Bank Ltd. were impleaded as respondents. After hearing the concerned parties, by an order dated 27th July, 2005, the learned Single Judge was pleased to direct the Special Officer to pay the amount deposited by the depositors with accrued interest thereon within 8 weeks from the date of receipt of a copy of the said order by the Special Officer. Upon perusal of the said order, it appears that the said petitions had been disposed of at an admission stage and even before any reply was filed on behalf of the Official Liquidator.

13. The Corporation was not a party before the High Court, but the right of the Corporation to get back the amount in preference over other depositors in pursuance of the provisions of the Act was adversely affected by virtue of the impugned judgment and therefore, the Corporation filed the Special Leave Petition which has now been converted into this appeal. These are the circumstances in which this appeal has been placed before us for hearing.

in the Rupee to each depositor.

(b) the insured bank or the transferee bank, as the case may be, as soon as the realisations and other amounts in its hands, after making provision for expenses payable by that time in respect of such realisations or other amounts in its hands are sufficient to enable it after the date of coming into force of the scheme referred to in section 18 of the Act, to pay or credit in respect of each depositor a sum not less than one paisa in the Rupee.”

29. In view of the aforestated statutory legal provision, in our opinion, the High Court should not have given the direction which, if complied with, would run contrary to the statutory provisions incorporated in the Act.

31. For the aforestated reason, we are of the view that the High Court had exceeded its authority while giving a direction to the Official Liquidator, which is not in consonance with the statutory provisions and therefore, we set aside the judgment and order delivered by the learned Single Judge as also by the Division Bench and direct the Official Liquidator and the Special Officer to act in accordance with the statutory provisions.

32. The appeal is, accordingly, allowed with no order as to costs.

CIVIL APPEAL NOS.1116, 1923, 1924, 1925, 1926, 1927, 1928, 1929, 1930, 1931, 1932, 1934 AND 1935 OF 2009

33. So far as Appeal No.1116 of 2009 and similar matters are concerned, we record the fact that they have been filed at an interlocutory stage and therefore, the said appeals are disposed of with a direction to the High Court to decide the matters, which are pending before it, in the light of the law laid down hereinabove.

CIVIL APPEAL NOS.5333, 5334, 5335, 5336 AND 5337-5339 OF 2012

34. In all the aforestated appeals, some compromise had been arrived at among the parties before the learned Single Judge, but the same had been challenged before the Division Bench. The Division Bench had quashed and set aside the order, whereby the litigants had entered into a compromise and the matters had been remanded to the learned Single Judge. We dismiss the aforestated appeals as the matters have been remanded to the learned Single Judge. However, we direct that the present appellant shall be impleaded as a party-respondent before the learned Single Judge so that all Writ Petitions can be decided afresh after considering the provisions of the Act and after hearing the present appellant.

35. The appeals are, thus, disposed of with no order as to costs.

…………………………………………………….J (ANIL R. DAVE) …………………………………………………….J (DIPAK MISRA) NEW DELHI;

JULY 01, 2015.