Insolvency bar for nationalised banks: a corresponding new bank treated as a Government company is not amenable to petition under the insolvency law.

A nationalised bank constituted as a corresponding new bank and Government company fell within the statutory bar in section 8 of the Provincial Insolvency Act, 1920. The Court treated the bank as a body corporate and as a company registered under the relevant enactment for this purpose, so it was not amenable to insolvency proceedings. The objection to the insolvency petition was therefore correctly upheld, and the writ petition failed for want of legal entitlement to relief.

---

---

Issues: Whether a nationalised bank, treated as a corresponding new bank and Government company, is exempt from insolvency proceedings under section 8 of the Provincial Insolvency Act, 1920.

Analysis: Section 8 of the Provincial Insolvency Act, 1920 bars insolvency petitions against corporations and against associations or companies registered under any enactment in force. The bank fell within the statutory framework of the Banking Regulation Act, 1949 as a banking company, and after nationalisation under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 it became a body corporate and a corresponding new bank. In that statutory setting, the bank answered the description of a registered company and also a Government company for the purposes relevant to the insolvency objection.

Conclusion: The bank was exempt from insolvency proceedings, and the rejection of the insolvency petition was in law.

Final Conclusion: The writ petition failed because the statutory objection to the insolvency petition was rightly upheld, leaving the petitioner without relief.

Ratio Decidendi: A nationalised banking institution which is a corresponding new bank and a Government company is treated as a company registered under the relevant enactment and is not amenable to an insolvency petition barred by section 8 of the Provincial Insolvency Act, 1920.

---