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Issues: (i) Whether a moratorium imposed under section 45 of the Banking Regulation Act, 1949 suspends a bank's operations even in relation to its dealings as an authorised dealer in foreign exchange under the Foreign Exchange Regulation Act, 1973. (ii) Whether the moratorium violates the right under article 26(d) of the Constitution of India to administer religious property according to law.
Issue (i): Whether a moratorium imposed under section 45 of the Banking Regulation Act, 1949 suspends a bank's operations even in relation to its dealings as an authorised dealer in foreign exchange under the Foreign Exchange Regulation Act, 1973.
Analysis: Section 45 imposes a moratorium on the banking company itself and stays its activities during the currency of the order. The prohibition is not confined to ordinary banking business, but extends to the bank's operations as a whole. A bank's authority to deal in foreign exchange under the Foreign Exchange Regulation Act does not override the effect of a statutory moratorium, and the existence of a separate authorisation under another enactment does not preserve the bank's power to transact during the moratorium. The bank therefore remains in status quo and cannot permit withdrawals except to the extent allowed by the Government order.
Conclusion: The moratorium validly suspended the bank's foreign exchange-related operations, and the petitioners were not entitled to withdraw amounts beyond what was permitted under the moratorium order.
Issue (ii): Whether the moratorium violates the right under article 26(d) of the Constitution of India to administer religious property according to law.
Analysis: Article 26(d) protects administration of religious property only according to law. The provision does not exempt such property from otherwise valid legislation, nor does it confine constitutional challenge to grounds of public order, morality, and health. In the absence of any challenge to the validity of the Banking Regulation Act itself, the statutory moratorium cannot be treated as an infringement of article 26(d).
Conclusion: No violation of article 26(d) was established.
Final Conclusion: The original petitions were rejected on both grounds, and the moratorium was upheld as operating against the bank notwithstanding its status as an authorised dealer in foreign exchange.
Ratio Decidendi: A statutory moratorium imposed on a banking company suspends the company's operations as such, including ancillary business carried on under other statutory authorisations, unless the moratorium order itself provides otherwise; article 26(d) protects administration of property only in accordance with valid law.
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