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Sec 44, Banking Reg. Act 1949: High Court powers in Voluntary winding-up

Section 44 (Powers of High Court in voluntary winding up) under Part III (Suspension of Business and Winding up of Banking Companies) of the Banking Regulation Act 1949 :—

❝(1) Notwithstanding anything to the contrary contained in section 484 of the Companies Act, 1956 (1 of 1956), no banking company may be voluntarily wound up unless the Reserve Bank certifies in writing that the company is able to pay in full all its debts to its creditors as they accrue.

(2) The High Court may, in any case where a banking company is being wound up voluntarily, make an order that the voluntary winding up shall continue, but subject to the supervision of the court.

(3) Without prejudice to the provisions contained in sections 441 and 521 of the Companies Act, 1956 (1 of 1956), the High Court may of its own motion and shall on the application of the Reserve Bank, order the winding up of a banking company by the High Court in any of the following cases, namely: -
  (a) where the banking company is being wound up voluntarily and at any stage during the voluntary winding up proceedings the company is not able to meet its debts as they accrue; or
  (b) where the banking company is being wound up voluntarily or is being wound up subject to the supervision of the court and the High Court is satisfied that the voluntary winding up or winding up subject to the supervision of the court cannot be continued without detriment to the interests of the depositors.❞




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Notes:

The Banking Regulation Act, 1949 (Act No. 10 of 1949) was amended by various other enactments subsequently as mentioned hereunder:

- Banking Companies (Amendment) Act, 1950 (No. 20 of 1950);
- Banking Companies (Amendment) Act, 1953 (52 of 1953);
- State Bank of India Act, 1955 (No. 23 of 1955);
- Jammu and Kashmir (Extension of Laws) Act, 1956 (No. 62 of 1956);
- State Bank of Hyderabad Act, 1956 (No. 79 of 1956);
- Banking Companies (Amendment) Act, 1956 (No. 95 of 1956);
- Banking Companies (Amendment) Act, 1959 (No. 33 of 1959);
- State Bank of India (Subsidiary Banks) Act, 1959 (No. 38 of 1959)
- Banking Companies (Second Amendment) Act, 1960 (No. 37 of 1960);
- Banking Companies (Amendment) Act, 1961 (No. 7 of 1961);
- Deposit Insurance and Credit Guarantee Corporation Act, 1961 (No. 47 of 1961);
- Banking Companies (Amendment) Act, 1962 (No. 36 of 1962);
- Banking Laws (Miscellaneous Provisions) Act, 1963 (No. 55 of 1963);
- Banking Laws (Application to Co-operative Societies) Act, 1965 (No. 23 of 1965);
- Banking Laws (Amendment) Act, 1968 (No. 58 of 1968);
- National Bank for Agriculture and Rural Development Act, 1981 (No. 61 of 1981);
- Banking Laws (Amendment) Act, 1983 (No. 1 of 1984);
- Industrial Reconstruction Bank of India Act, 1984 (No. 62 of 1984);
- National Housing Bank Act, 1987 (No. 53 of 1987);
- Banking Public Financial Institutions and Negotiable Instruments Laws (Amendment) Act, 1988 (No. 66 of 1988);
- Small Industries Development Bank of India Act, 1989 (No. 39 of 1989);
- Banking Regulation (Amendment) Act, 1991 (No. 54 of 1991);
- Banking Regulation (Amendment) Act, 1994 (No. 20 of 1994);
- Banking Regulation (Amendment) and Miscellaneous Provisions Act, 2004 (No. 24 of 2004);
- Special Economic Zones Act, 2005 (No. 28 of 2005);
- Banking Regulation (Amendment) Act, 2007 (No. 17 of 2007);
- Banking Laws (Amendment) Act, 2012 (No. 4 of 2013);
- Banking Regulation (Amendment) Act, 2017 (No. 30 of 2017).

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