Moratorium under banking law upheld without pre-decisional hearing; statutory post-decisional objection process was held sufficient.

A moratorium ordered under Section 45(2) of the Banking Regulation Act, 1949 was described as a statutory step in a banking arrangement, and the absence of a pre-decisional hearing did not invalidate it because the scheme itself provided a later opportunity to object when the draft scheme was considered. Those objections were to be examined in the statutory process under Section 45(7), after the draft scheme was framed under Section 45(4) and forwarded under Section 45(6). The apprehension that the Central Government would not fairly consider the petitioners' objections was not accepted, and the petitioners' request to continue as non-banking companies after discharging their dues was directed to receive due consideration, with additional time granted for decision.

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Issues: Whether an order of moratorium under Section 45(2) of the Banking Regulation Act, 1949 required a pre-decisional hearing, whether the statutory post-decisional opportunity before consideration of objections to the draft scheme was sufficient, and whether the Central Government should be given further time to consider the petitioners' objections.

Analysis: The moratorium was issued in exercise of statutory power for a banking arrangement under the Act. In that setting, the absence of a hearing before the moratorium did not vitiate the order, because the statutory scheme contemplated a later opportunity when objections to the draft scheme were considered. The objections were to be examined in the process under Section 45(7) on the basis of the draft scheme framed under Section 45(4) and forwarded under Section 45(6), and the petitioners' apprehension that the Central Government would not consider them was not accepted. The Court also indicated that the petitioners' specific submission that they might be allowed to continue as non-banking companies after discharging all dues deserved due consideration, and to secure effective consideration the time for decision was extended.

Conclusion: No pre-decisional hearing was required for the moratorium order, the post-decisional statutory process was sufficient, and the petitioners were entitled to have their objections considered by the Central Government with further time granted for that purpose.

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