Deposit insurance repayment priority governs surplus realisations after insured claims are paid under the statutory scheme.

The statutory deposit insurance scheme covered deposits only up to the prescribed ceiling, and the Official Liquidator was required to furnish depositor details so the Corporation could discharge that liability. Once the insured amount was paid, the remaining realisations could not be redistributed to depositors contrary to the repayment mechanism in Section 21, which operated notwithstanding any inconsistent law. Regulation 22 likewise required repayment to the Corporation from the liquidator's hands after provision for liquidation expenses and dividend. The Supreme Court therefore treated the Corporation's repayment priority as mandatory and found the High Court's contrary direction unsustainable.

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Issues: Whether, after payment of the insured amount to depositors of an insured bank under the deposit insurance scheme, the Official Liquidator was bound to repay the available surplus to the Corporation in priority, rather than distribute it further among depositors.

Analysis: The statutory scheme contemplated insurance of deposits only up to the prescribed ceiling for each depositor, with the Official Liquidator required to furnish deposit details and the Corporation to discharge its liability to that extent. Section 21 created a clear repayment mechanism in favour of the Corporation, and sub-section (2) operated notwithstanding anything contrary in any other law. Regulation 22 further required repayment to the Corporation out of realisations in the hands of the liquidator after making provision for liquidation expenses and dividend. The Court held that once the insured amount had been paid, any further available amount could not be directed to be distributed to depositors in disregard of this statutory mandate.

Conclusion: The direction of the High Court was unsustainable, and the available amount had to be dealt with in accordance with the statutory repayment priority in favour of the Corporation.

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