THE
BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDRTAKINGS) ACT,
1970
NO.5 OF 1970
[31st March,
1970]
An Act to provide for the acquisition and transfer of
the undertakings of certain banking companies, having regard to
their size, resources, coverage and organisation, in order to
control the heights of the economy and to meet progressively, and
serve better, the needs of development of the economy in conformity
with national policy and objectives and for matter connected
therewith or incidental thereto.
Be it enacted by parliament
in the Twenty-first year of the Republic of India as
follows:-
CHAPTER
I
PRELIMINARY
1.Short title and
commencement.- (1) This Act may be called the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970.
(2) The
Provisions of this Act (except section 21, which shall come into
force on the appointed day) shall be deemed to have come into force
on the 19th day of July, 1969.
2.Definitions.- In this
Act, unless the context otherwise requires,------
(a)
"appointed day" means the 14th day of February, 1970 (3 of 1970),
being the day on which the Banking Companies (Acquisition and
Transfer of Undertakings) Ordinance, 1970, was
promulgated;
(b) "banking company" does not include a foreign
company 5 within the meaning of section 591 of the Companies Act,
1956 (1 of 1956);
(c) "commencement of this Act" means the
19th day of July, 1969;
(d) "corresponding new bank", in
relation to an existing bank, means the body corporate specified
against such bank in column 2 of the First Schedule;
(e)
"Custodian" means the person who becomes, or is appointed, a
Custodian under section 7;
(f) "existing bank" means a
banking company specified in column 1 of the First Scheduled, being
a company the deposits of which, as shown in the return as on the
last Friday of June, 1969, furnished to the Reserve Bank under
section 27 of the Banking Regulation Act, 1949, were not less than
rupees fifty crores;
(g) "Schedule" means a Scheduled to this
Act;
(h) words and expressions used herein and not defined
but defined in the Banking Regulation Act, 1949, have the meanings
respectively assigned to them in that Act.
CHAPTER II
TRANSFER
OF THE UNDERTAKINGS OF EXISTING BANKS
3.Establishment of
corresponding new banks and business thereof.-(1) On the
commencement of this Act, there shall be constituted such
corresponding new banks as are specified in the First Schedule.
(2) The Paid-up capital of every
corresponding new bank constituted under sub-section (1) shall until
any provision is made in this behalf in any scheme made under
section 9, be equal to the paid-up capital of the existing bank in
relation to which it is the corresponding new bank.
(3) The
entire capital of each corresponding new bank shall stand vested in,
and allotted to, the Central Government.
(4) Every
corresponding new bank shall be a body corporate with perpetual
succession and a common seal with power, subject to the provisions
of this Act, to acquire, hold and dispose of property, and to
contract, and may sue and be sued in its name.
(5) Every
corresponding new bank shall carry on and transact the business of
banking as defined in clause (b) of section 5 of the Banking
Regulation Act, 1949 (10 of 1949), and may engage in one or more
forms of business specified in sub-section (1) of section 6 of that
Act.
(6) Every corresponding new bank shall establish a
reserve fund to which shall be transferred the share premiums and
the balance, if any, standing to the credit of the reserve of the
reserve fund of the existing bank in relation to which it is the
corresponding new bank, and such further sum, if any, as may be
transferred in accordance with the provisions of section 17 of the
Banking Regulation Act, 1949 (10 of 1949).
4.Undertaking of existing banks
to vest in corresponding new banks.-On the commencement of this
Act, the undertaking of every existing bank shall be transferred to,
and shall vest in, the corresponding new bank.
5.General effect of
vesting.- (1) The undertaking of each existing bank shall be
deemed to include all assets, rights, powers, authorities and
privileges and all property, movable and immovable, cash balances,
reserve funds, investments and all other rights and interests in, or
arising out of, such property as were immediately before the
commencement of this Act in the ownership, possession, power or
control of the existing bank in relation to the undertaking, whether
within or without India, and all books of accounts, registers,
records and all other documents or whatever nature relating thereto
and shall also be deemed to include all borrowings, liabilities and
obligations of whatever kind then subsisting of the existing bank in
relating to the undertaking.
(2) If, according to the laws of
any country outside India, the provisions of this Act by themselves
are not effective to transfer or vest any asset or liability
situated in that country which forms part of the undertaking of an
existing bank to, or in, the corresponding new bank, the affaires of
the existing bank in relation to such asset or liability shall, on
and from the commencement of this Act, stand entrusted to the chief
executive officer for the time being of the corresponding new bank,
and the chief executive officer may exercise all powers and do all
such acts and things as may be exercised or done by the existing
bank for the purpose of effectively transferring such assets and
discharging such liabilities.
(3) The chief executive officer
of the corresponding new bank shall, in exercise of the powers
conferred on him by sub-section (2), take all such steps as may be
required by the laws of any such country outside India for the
purpose of effecting such transfer or vesting, and may either
himself or through any person authorised by him in this behalf
realise any asset and discharge any liability of the existing
bank.
(4) Unless otherwise expressly provided by this Act,
all contracts, deeds, bonds, agreements, powers of attorney, grants
of legal representation and other instruments of whatever nature
subsisting or having effect immediately before the commencement of
this Act and to which the existing bank is a party or which are in
favour of the existing bank shall be of as full force and effect
against or in favour of the corresponding new bank, and may be
enforced or acted upon as fully and effectually as if in the place
of the existing bank the corresponding new bank had been a party
thereto or as if they had been issued in favour of the corresponding
new bank.
(5) If, on the appointed day, any suit,
appeal or other proceeding of whatever nature in relation to any
business of the undertaking which has been transferred under section
4, is pending by or against the existing bank, the same shall not
abate, be discontinued or be, in any way, prejudicially affected by
reason of the transfer of the undertaking of the existing bank or of
anything contained in this Act but the suit, appeal or other
proceeding may be continued, prosecuted and enforced by or against
the corresponding new bank.
(6) Nothing in this Act shall be
construed as applying to the assets, rights, powers, authorities and
privileges and property, movable and immovable, cash balances and
investments in any country outside India (and other rights and
interests in, or arising out of, such property) and borrowings,
liabilities and obligations of whatever kind subsisting at the
commencement of this Act, of any existing bank operating in the
country if, under the laws in force in that country, it is not
permissible for a banking company, owned or controlled by
Government, to carry on the business of banking there.
CHAPTER III
PAYMENT
OF COMPENSATION
6.Payment of compensation.-
(1) Every existing bank shall be given by the Central Government
such compensation in respect of the transfer, under section 4, to
the corresponding new bank of the undertaking of the existing banks
as is specified against each bank in the Second Schedule.
(2)
The amount of compensation referred to in sub-section (1) shall be
given to every existing bank, at its option,
(a) in cash (to
be paid by cheque drawn on the Reserve Bank) in three equal annual
instalments, the amount of each instalment carrying interest at the
rate of four per cent per annuam form the commencement of this Act,
or
(b) in saleable or otherwise transferable promissory notes
or stock certificates of the Central Government issued and repayable
at par, and maturing at the end of---------
(i) ten years
from the commencement of this Act and carrying interest from such
commencement at the rate of four and a half per cent per annum,
or
(ii) thirty years from the commencement of this Act and
carrying interest from such commencement at the rate of five and a
half per cent per annum, or
(c) partly in cash (to be paid by
cheque drawn on the Reserve Bank) and partly in such number of
securities specified in sub-clauses (i) or sub-clause (ii), or both,
of clause (b), as may be required by the existing bank,
or
(d) partly, in such number of securities specified in
sub-clause (i) of clause (b) and partly in such number of securities
specified in sub-clause (ii) of that clause, as may be required by
the existing bank.
(3) The first of the three equal annual
instalments referred to in clause (a) of sub-section (2) shall be
paid, and the securities referred to in clause (b) of that
sub-section shall be issued, within sixty days from the date of
receipt by the Central Government of the option referred to in that
sub-section, or where no such option has been exercised, from the
latest date before which such option ought to have been
exercised.
(4) The option referred to in sub-section (2)
shall be exercised by every existing bank before the expiry of a
period of three months from the appointed day (or within such
further time, not exceeding three months, as the Central Government
may, on the application of the existing bank, allow) and the option
so exercised shall be final and shall not be altered or rescinded
after it has been exercised.
(5) Any existing bank which
omits or fails to exercise the option referred to in sub-section
(2), within the time specified in sub-section (4), shall be deemed
to have opted for payment in securities specified in sub-clauses (I)
of clause (b) of sub-section (2).
(6) Notwithstanding
anything contained in this section, any existing bank may, before
the expiry of three months from the appointed day (or within such
further time, not exceeding three months, as the Central Government
may, on the application of the existing bank, allow) make an
application in writing to the Central Government for an interim
payment of an amount equal to seventy-five per cent of the amount of
the paid-up capital of such bank, as on the commencement of this
Act, indicating therein whether the payment is desired in cash or in
securities specified in sub-section (2), or in both.
(7) The
Central Government shall, within sixty days from the receipt of the
application referred to in sub-section (6), make the interim payment
to the existing bank in accordance with the option indicated in such
application.
(8) The interim payment made to an existing bank
under sub-section (7), shall be set off against the total amount of
compensation payable to such existing bank under this Act and the
balance of the compensation remaining outstanding after such payment
shall be given to the existing bank in accordance with the option
exercised, or deemed to have been exercised, under sub-section (4)
or sub-section (5), as the case may be:
Provided that where
any part of the interim payment is obtained by an existing bank in
cash, the payment so obtained shall be set off, in the first
instance, against the first instalment of the cash payment referred
to in sub-section (2), and in cash the payment so obtained exceeds
the amount of the first instalment, the excess amount shall be
adjusted against the second instalment and the balance of such
excess amount if any, against the third instalment of the cash
payment.
(9) Any payment purported to have been made to an
existing bank under sub-section (3) of section 15 of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1969 (22
of 1969), shall be deducted by the Central Government from the
amount of the interim payment made to such existing bank under
sub-section (7), or where no such interim payment has been made,
from the total amount of the compensation due to such existing bank,
and the amount so deducted shall be paid by the Central Government
to the corresponding new Bank.
CHAPTER
IV
MANAGEMENT OF CORRESPONDING NEW BANKS
7.Head office and
management.- (1) The Head Office of each corresponding new bank
shall be at such place as the Central Government may, by
notification in the Official Gazette, specify in this behalf, and,
until and such place is so specified, shall be at such place at
which the head office of existing bank, in relation to which it is
the corresponding new bank, is one the commencement of this Act,
located.
(2) The general superintendence, direction and
management of the affairs and business of a corresponding new bank
shall vest in a Board of Directors which shall be entitled to
exercise all such powers and do all such acts and things as the
corresponding new bank is authorised to exercise and do.
(3)
(a) As soon as may be after the appointed day, the Central
Government shall, in consultation with the Reserve Bank, constitute
the first Board of Directors of a corresponding new bank, consisting
of not more than seven persons, to be appointed by the Central
Government, and every director so appointed shall hold office until
the Board of Directors of such corresponding new bank is constituted
in accordance with the scheme made under section 9:
Provided that the Central Government may,
if it is of opinion that it is necessary in the interests of he
corresponding new bank so to do, remove a person from the membership
of the first Board of Directors and appoint any other person in his
place.
(b) Every Member of the first Board of Directors (not
being an officer of the Central Government or of the Reserve Bank)
shall receive such remuneration as is equal to the remuneration
which a member of the Board of Directors of the existing bank was
entitled to receive immediately before the commencement of this
Act.
(4) Until the first Board of Directors is appointed by
the Central Government under sub-section (3), the general
superintendence, direction and management of the affairs and
business of a corresponding new bank shall vest in a Custodian, who
shall be the chief executive officer of that bank and may exercise
all powers and do all acts and things as may be exercised or done by
that bank
(5) The Chairman of an existing bank holding office
as such immediately before the commencement of this Act, shall be
the Custodian of the corresponding new bank and shall receive the
same emoluments as he was receiving immediately before such
commencement:
Provided that the Central Government may, if
the Chairman of an existing bank declines to become, or to continue
to functions as, a Custodian of the corresponding new bank, or, if
it is of opinion that it is necessary in the interests of the
corresponding new bank so to do, appoint any other person as the
Custodian of a corresponding new bank so to do, appoint any other
person as the Custodian of a corresponding new bank so, to do,
appoint any other person as the Custodian of a corresponding new
bank and the Custodian so appointed shall receive such emoluments as
the Central Government may specify in this behalf.
(6) The
Custodian shall hold office during the pleasure of the Central
Government
8.Corresponding new banks to be
guided by the directions of the Central Government.- Every
corresponding new bank shall, in the discharge of its functions, be
guided by such directions in regard to matters of policy involving
public interest as the Central Government may, after consultation
with the Governor of the Reserve Bank, give.
9.Power of Central Government
to make scheme.- (1) The Central Government may, after
consultation with the Reserve Bank, make a scheme for carrying out
the provisions of this Act.
(2) In particular, and without
prejudice to the generality of the foregoing power, the said scheme
may provide for all or any of the following matters, namely
:-
(a) the capital structure of the corresponding new bank,
so however that the paid-up capital of any such bank shall not be in
excess of rupees fifteen crores:
(b) the constitution of the
Board of Directors, by whatever name called, of the corresponding
new bank and all such matters in connection therewith or incidental
thereto as the Central Government may consider to be necessary to
expedient;
(c) the reconstitution of any corresponding new
bank into two or more corporations, the amalgamation of any
corresponding new bank with any other corresponding new bank or with
another banking institution, the transfer of the whole or any part
of the undertaking of a corresponding new bank to any other banking
institution or the transfer of the whole or any part of the
undertaking of any other banking institution to a corresponding new
bank;
(d) such incidental, consequential and supplemental
matters as may be necessary to carry out the provisions of this
Act.
(3) Every Board of Directors of a corresponding new
bank, constituted under any scheme made under sub-section (1) shall
include------
(a) representatives of the employees, and of
depositors, of such bank, and
(b) such other persons as may
represent the interests of each of the following categories, namely,
farmers, workers and artisans,
to be elected or nominated in
such manner as may be specified in the scheme.
(4) The
Central Government may, after consultation with the Reserve Bank,
make a scheme to amend or vary any scheme made under sub-section
(1).
(5) Every scheme made by the Central Government under
this Act shall be laid, as soon as may be after it is made, before
each House of Parliament while it is in session for a total period
of thirty days which may be comprised in one session or in two
successive sessions, and if, before the expiry of the session in
which it is so laid or the session immediately following both Houses
agree in making any modification in the scheme or both Houses agree
that the scheme should not be made, the scheme shall thereafter have
effect only in such modified from or be of no effect, as the case
may be; so, however that any such modification or annulment shall be
without prejudice to the validity of anything previously done under
that scheme.
CHAPTER
V
MISCELLANEOUS
10.Closure of accounts and
disposal of profits.- (1) Every corresponding new bank shall
cause its books to be closed and balanced on the 31st day of
December of each year and shall appoint, with the previous approval
of the Reserve Bank, auditors for the audit of its
accounts.
(2) Every auditor of a corresponding new bank shall
be a person who is qualified to act as an auditor of a company under
section 226 of the Companies Act, 1956, and shall receive such
remuneration as the Reserve Bank may fix in consultation with the
Central Government
(3) Every auditor shall be supplied with a
copy of the annual balance-sheet and profit and loss account and a
list of all books kept by the corresponding new bank, and it shall
be the duty of the auditor to examine the balance-sheet and profit
and loss account with the accounts and vouchers relating thereto,
and in the performance of his duties, the auditor-----
(a)
shall have, at all reasonable times, access to the books, accounts
and other documents of the corresponding new bank.
(b) may,
at the expense of the corresponding new bank, employ accountants or
other persons to assist him in investigating such accounts,
and
(c) may, in relation to such accounts, examine the
Custodian or any officer or employee of the corresponding new
bank.
(4) Every auditor of a corresp0nding new bank shall
make a report to the Central Government upon the annual
balance-sheet and accounts and in every such report shall
state-----
(a) whether, in his opinion, the balance-sheet is
a full and fair balance-sheet containing al, the necessary
particulars and is properly drawn up so as to exhibit a true and
fair view of the affairs of the corresponding
(b) whether or not the
transactions of the corresponding new bank, which have come to his
notice, have been within the powers of that bank;
(c) whether
or not the returns received from the offices and branches of the
corresponding new bank have been found adequate for the purposes of
his audit;
(d) whether the profit and loss account shows a
true balance of profit or loss for the period covered by such
account; and
(e) any other matter which he considers should
be brought to the notice of the Central Government.
(5) The
report of the auditor shall be verified, signed and transmitted to
the Central Government.
(6) The auditor shall also forward a
copy of the audit report to the corresponding new bank and to the
Reserve Bank.
(7) After making provision for bad and
doubtful, debts, depreciation in assets, contributions to staff and
superannuating funds and all other matters for which provision is
necessary under any law, or which are usually provided for by
banking companies, a corresp9nding new bank shall transfer the
balance of profits to the Central Government.
(8) The Central
Government shall cause every auditor's report and report on the
working and activities of each corresponding new bank to be laid for
not less than thirty days before each House of Parliament as soon as
may be after each such report is received by the Central
Government.
11.Corresponding new bank
deemed to be an Indian company.- For the purposes of the
Income-tax Act, 1961 (43 of 1961), every corresponding new bank
shall be deemed to be an Indian company and a company in which the
public are substantially interested.
12.Removal of Chairman from
office.- (1) Every person holding office, immediately before the
commencement of this Act, as Chairman of an existing bank shall, if
he becomes Custodian of the corresponding new bank, he deemed, on
such commencement, to have vacated office as such
Chairman.
(2) Save as otherwise provided in sub-section (1),
every officer or other employee of an existing bank shall become, on
the commencement of this Act, an officer or other employee, as the
case may be, of the corresponding new bank and shall hold his office
or service in that bank on the same terms and conditions and with
the same rights to pension, gratuity and other matters as would have
been admissible to him if the undertaking of the existing bank had
not been transferred to and vested in the corresponding new bank and
continue to do so unless and until his employment in the
corresponding new bank is terminated or until his remuneration,
terms or conditions are duly altered by the corresponding new
bank.
(3) For the persons who immediately before the
commencement of this Act were the trustees for any pension,
provident, gratuity or other like fund constituted for the officers
or other employees of an existing bank, there shall be substituted
as trustees such persons as the Central Government may, by general
or special order, specify.
(4) Notwithstanding anything
contained in the Industrial Disputes Act, 1947 (14 of 1947), or in
any other law for the time being in force, the transfer of the
services of any officer or other employee from an existing bank to a
corresponding new bank shall not entitle such officer or other
employee to any compensation under this Act or any other law for the
time being in force and no such claim shall be entertained by any
court, tribunal or other authority.
13.Obligations as to fidelity
and secrecy.-(1) Every corresponding now bank shall observe,
except as otherwise required by law, the practices and usages
customary among bankers, and in particular, it shall not divulge any
information relating to or to the affairs of its constituents except
in circumstances in which it is, in accordance with law or practices
and usages customary among bankers, necessary or appropriate for the
corresponding new bank to divulge such information.
(2) Every
director, member of a local board or a committee, or auditor,
adviser, officer or other employee of a corresponding new bank
shall, before entering upon his duties, make a declaration of
fidelity and secrecy in the form set out in the Third
Schedule.
(3) Every Custodian of a corresponding new bank
shall, as soon as possible, make a declaration of fidelity and
secrecy in the form set out in the Third Schedule.
14.Custodian to be public
servant.- Every Custodian of a corresponding new bank shall be
deemed to be a public servant for the purposes of Chapter IX of the
Indian Penal Code (45 of 1860).
15.Certain defects not to
invalidate acts or proceedings.- (1) All acts done by the
Custodian, acting in good faith, shall, notwithstanding any defect
in his appointment or in the procedure, be valid.
(2) No act
or proceeding of any Board of Directors or a local board or
committee of a corresponding new bank shall be invalid merely on the
ground of the existence of any vacancy in, or defect in the
constitution, of, such board or committee, as the case may
be.
(3) All acts done by a person acting in good faith as a
director or member of a local board or committee of a corresponding
new bank shall be valid, notwithstanding that it may afterwards be
discovered that his appointment was invalid by reason of any defect
or disqualification or had terminated by virtue of any provision
contained in any law or the time being in force:
Provided
that nothing in this section shall be deemed to give validity to any
act by a director or member of a local board or committee of a
corresponding new bank after his appointment has been shown to the
corresponding new bank to be invalid or to have
terminated.
16.Indemnity.- (1) Every
Custodian of a corresponding new bank and every officer of the
Central Government or of the Reserve Bank and every officer or other
employee of a corresponding new bank, shall be indemnified by such
bank against all losses and expenses incurred by him in or in
relation to the discharge of his duties except such as have been
caused by his own wilful act or default.
(2) A director or
member of a local board or committee of a corresponding new bank
shall not be responsible for any loss or expense caused to such bank
by the insufficiency or deficiency of the value of, or title to, any
property or security acquired or taken on behalf of the
corresponding new bank, or by the insolvency or wrongful act of any
customer or debtor, or by anything done in or in relation to the
execution of the duties of his office, unless such loss, expenses,
insufficiency or deficiency was due to any willful act or default on
the apart of such director or member.
17.References to existing
banks on and from the commencement of this Act.- Any reference
to any existing bank in any law, other than this Act, or in any
contract or other instrument shall, in so far as it relates to the
undertaking which has been transferred by section 4, be construed as
a reference to the corresponding new bank.
18.Dissolution.-No
provision of law relating to winding up of corporations shall apply
to a corresponding new bank and no corresponding new bank shall be
placed in liquidation save by order of the Central Government and in
such manner as it may direct.
19.Power to make
regulations.- (1) The Board of Directors of a corresponding new
bank may, after
consultation with the Reserve Bank and
with the previous sanction of the Central Government, make
regulations, not inconsistent with the previsions of this Act or any
scheme made thereunder, to provide for all matters for which
provision is expedient for the purpose of giving effect to the
provisions of this Act.
(2) In particular, and without
prejudice to the generality of the foregoing power, the regulations
may provide for all or any of the following matters, namely
:-
(a) the powers, functions and duties of local boards and
restrictions, conditions or limitations, if any, subject to which
they may be exercised or performed, the formation and constitution
of local committees and committees of local board (including the
number of members of any such committee), the powers, functions and
duties of such committees, the holding of meetings of local
committees and committees of local boards and the conduct the
business thereat;
(b) the manner in which the business of the
local boards shall be transacted and the procedure in connection
therewith;
(c) the delegation of powers and functions of the
board of directors of a corresponding new bank to the general
manager, director, officer or other employee of that
bank;
(d) the conditions or limitation subject to which the
corresponding new bank may appoint advisers, officers or other
employees and fix their remuneration and other terms and conditions
of service;
(e) the duties and conduct of advisers, officers
or other employees of the corresponding new bank;
(f) the
establishment and maintenance of superannuation, pension, provident
or other funds for the benefit of officers or other employees of the
corresponding new bank or of the dependants of such officers or
other employees and the granting of superannuation allowances,
annuities and pensions payable out of such funds;
(g) the
conduct and defence of legal proceedings by or against the
corresponding new bank and the manner of signing
pleadings;
(h) the provision of a seal for the corresponding
new bank and the manner and effect of its use;
(i) the form
and manner in which contracts binding on the corresponding new bank
may be executed;
(j) the conditions and the requirements
subject to which loans or advances may be made or bills may be
discounted or purchased by the corresponding new bank;
(k)
the persons or authorities who shall administer any pension,
provident or other fund constituted for the benefit of officers or
other employees of the corresponding new bank or their
dependants;
(l) the preparation and submission of statements
of programmes of activities and financial statements of the
corresponding new bank and the period for which and the time within
which such statements and estimates are to be prepared and
submitted; and
(m) generally for the efficient conduct of the
affairs of the corresponding new bank.
(3) Until any
regulation is made under sub-section (1), the articles of
association of the existing bank and every regulation, rule, bye-law
or order made by the existing bank shall, if in force at the
commencement of this Act, be deemed to be the regulations made under
sub-section (1) and shall have effect accordingly and any reference
therein to any authority of the existing bank shall be deemed to be
a reference to the corresponding authority of the corresponding new
bank and until any such corresponding authority is constituted under
this Act, shall be deemed to refer to the Custodian.
Comment: But mere reference to the rule,
even if it mentions grounds for compulsory retirement, cannot be
regarded as sufficient for treating the order of compulsory
retirement as an order of punishment. In such a case, the order can
be said to have been passed in terms of the rule and, therefore, a
different intention cannot be inferred. So also, if the statement in
the order refers only to the assessment of his work and does not at
the same time cast an aspersion on the conduct or character of the
Government servant, then it will not be proper to hold that the
order of compulsory retirement is in reality an order of punishment.
Whether the statement in the order is stigmatic or not will have to
be judged by adopting the test of how a reasonable person would read or understand it.
Allahabad Bank Officers Association v. Allahabad Bank. AIR 1996
SUPREME COURT 2030
20.Amendment of certain
enactments.- (1) In the Banking Regulation Act, 1949 (10 of
1949),
(a) in section 34A, in sub-section (3), for the words "and
any subsidiary bank", the words, figures and brackets "a
corresponding new bank constituted under section 3 of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1970, and
any subsidiary bank" shall be substituted;
(b) in section
36AD, in sub-section (3), for the words "and any subsidiary bank",
the words, figures and brackets "a corresponding new bank
constituted under section 3 of the Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970, and any subsidiary bank"
shall be substituted;
(c) in section 51, for the words "or
any other banking institution notified by the Central Government in
this behalf", the words, figures and brackets "or any corresponding
new bank constituted under section 3 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970, or any other
banking institution notified by the Central Government in this
behalf" shall be substituted;
(d) in the Fifth Schedule, in
Part I of paragraph 1, in clause (e), the Explanations shall be
deemed never to have been inserted.
(2) In the Industrial
Disputes Act, 1947 (14 of 1947), in section 2, in clause (bb), for
the words "and any subsidiary bank", the words, figures and brackets
"a corresponding new bank constituted under section 3 of the Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1970, and
any subsidiary bank" shall be substituted.
(3) In any Banking
Companies (Legal Practitioners' Clients' Accounts) Act, 1949 (46 of
1949), in section 2, in clause (a), for the words "and any
subsidiary Bank", the words, figures and brackets "a corresponding
new bank constituted under section 3 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970, and any
subsidiary bank" shall be substituted.
(4) In the Deposit
Insurance Corporation Act, 1961 (47 of 1961),------
(a)
in section 2,----------
(i)after clauses (c), the following
clauses shall be inserted namely:-
'(ee) "Corresponding new
bank" means a corresponding new bank constituted under section 3 of
the Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1970;
(ii) in clause (g),
(a) for the words "or a
banking company", the words "a corresponding new bank or a banking
company", and
(b) for the words "with a banking company", the
words "with a corresponding new bank or with a banking
company",
shall be substituted;
(iii) in clause (i),
after the words "banking company", the words "or a corresponding new
bank" shall be inserted;
(b) section 13 shall be re-numbered
as sub-section (1) therefore and after sub-section (1) as so
re-numbered, the following sub-section shall be inserted,
namely:-
"(2) The provisions of clauses (a), (b), (c), (d)
and (h) (5) of sub-section (1) shall apply to a corresponding new
bank as they apply to a corresponding new bank as they apply to a
banking company."
(5) In the State Agricultural Credit
Corporation Act, 1968 (60 of 1968),--------
(a) in section 2,
after clause (i), the following clause shall be inserted, namely
:-
'(ii) "corresponding new bank" means a corresponding new
bank constituted under section 3 of the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970;';
(b)
after the words "subsidiary banks" or "subsidiary bank", as the case
may be, occurring in clause (d) of sub-section (3) of section 5, in
clause (b) of section 9 and in the proviso to section 18, the words
"corresponding new banks" or "corresponding new bank", as the case
may be, shall be inserted.
21.Repeal and savings.- (1)
The Banking Companies (Acquisition and Transfer of Undertakings)
Ordinance, 1970 (3 of 1970), is hereby repealed.
(2)
Notwithstanding such repeal and notwithstanding any judgement,
decree or order of any court or tribunal,--------
(a) any
action taken, or purported to have been taken, or anything done, or
purported to have been done, between the 19th day of July, 1969, and
the 10th day of February, 1970, by any corresponding new bank
purported to have been constituted under the Banking Companies
(Acquisition and Transfer of Undertakings) Ordinance, 1969 (8 of
1969), or the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1969 (22 of 1969), or by any person purporting to
act on behalf of such bank and any right, obligation or liability
acquired or incurred, between the said dates, by or on behalf of
such corresponding new bank shall be deemed to have been taken,
done, acquired or incurred under the provisions of this Act by or on
behalf of the corresponding new bank constituted
thereunder.
(b) Any action taken, or purported to have been
taken, or anything done, or purported to have been done, between the
10the day of February, 1970, and the appointed day, by an existing
bank or by any person acting on behalf of such bank, and any right,
obligation or liability acquired or incurred, between the said
dates, by or on behalf of such existing bank shall be deemed to have
been taken, done, acquired or incurred under the provisions of this
Act by or on behalf of the corresponding new bank constituted
thereunder :
(c) Anything done or any action taken, including
any order made, notification issued or directions given under the
Banking Companies (Acquisition and Transfer and Undertakings)
Ordinance, 1970, shall be deemed to have been done, taken, made,
issued or given, as the case may be, under the corresponding
provisions of this Act.
(3) Any suit, appeal or other
proceedings of whatever nature instituted on or after the 19th day
of July, 1969, by or against a corresponding new bank purported to
have been constituted by the Banking Companies (Acquisition and
Transfer of Undertakings) Ordinance, 1969 (8 of 1969), or the
Banking Companies (Acquisition and Transfer of Undertakings) Act,
1969 (22 of 1969), shall not abate, be discontinued, or be, in any
way, prejudicially affected by reason of the expiry of the said
Ordinance or the invalidation of the said Act, as the case may be,
but such suit, appeal or other proceedings may be continued,
prosecuted and enforced by or against the corresponding new bank as
if such suit, appeal or other proceeding had been instituted by or
against the corresponding new bank constituted under this
Act.
THE FIRST
SCHEDULE
(See Section 2, 3 and
4)
________________________________________________________________________
Existing
bank Corresponding new Bank
________________________________________________________________________
Column
I Column
2
________________________________________________________________________
The
Central Bank of India Limited . . Central Bank of India.
The Bank
of India Limited . . Bank of India
The Punjab National Bank
Limited . . Punjab National Bank
The Bank of Baroda Limited . .
Bank of Baroda.
The United Commercial Bank Limited . . United
Commercial Bank.
Canara Bank Limited . . Canara Bank.
United
Bank of India Limited . . United Bank of India.
Dena Bank Limited
. . Dena Bank
Syndicate Bank Limited . . Syndicate Bank.
The
Union Bank of India Limited . . Union Bank of India.
Allahabad
Bank Limited . . Allahabad Bank
The Indian Bank Limited . .
Indian Bank
The Bank of Maharash Limited . . Bank of
Maharashtra.
The Indian Overseas Bank Limited . . Indian Overseas
Bank
_________________________________________________________________________
THE SECOND SCHEDULE
(See
section
6)
_____________________________________________________________________________________
Name
of the existing Bank Amount of
compensation
_____________________________________________________________________________________
(in
lakhs of rupees)
The Central Bank of India . . . 1750
The
Bank of India . . . 1470
The Punjab National Bank Limited . . .
1920
The Bank of Baroda Limited . . . 840
The United
Commercial Bank Limited . . . 830
Canara Bank Limited . . .
360
United Bank of India Limited . . . 420
Dena Bank Limited .
. . 360
Syndicate Bank Limited . . . 360
The Union Bank of
India Limited . . . 310
Allahabad Bank Limited . . . 310
The
Indian Bank Limited . . . 230
The Bank of Maharashtra Limited . .
. 230
The Indian Overseas Bank Limited . . .
250
___________________________________________________________________________________
THE THIRD
SCHEDULE
[See sub-sections (2) and (3) of section
13]
DECLARATION OF FIDELITY AND SECRECY
I,
____________ do hereby declare that I will faithfully, truly and to
the best of my skill and ability execute and perform the duties
required of me as Custodian, Director, member of local Board, member
of Local Committee, auditor, adviser, officer of other employee (as
the case may be ) of the {Name of corresponding new bank to be
filled in} and which properly relate to the office or position in
the said held by me.
I further declare that I will not
communicate or allow to be communicated to any person not legally
entitled thereto any information relating to the affairs of the
{Name of corresponding new bank to be filled in}or to the affairs of
any person having any dealing with the {Name of corresponding new
bank to be filled in}; nor will I allow any person to inspect or
have access to any books or documents belonging to or in the
possession of the {Name of corresponding new bank to be filled
in}and relating to the business of the {Name of corresponding new
bank to be filled in} or to the business of any person having any
dealing with the{Name of corresponding new bank to be filled
in}.