Repayment to Deposit Insurance Corporation under liquidation must follow the statutory sequence, not wait for full depositor satisfaction.

Section 21 of the Deposit Insurance and Credit Guarantee Corporation Act creates a repayment obligation to the Corporation after insured deposits are paid, and its non obstante clause displaces inconsistent law without creating an additional priority over all creditors. Regulation 22 governs the time and manner of repayment by requiring the liquidator, after making provision for liquidation expenses, to repay the Corporation when realisations are sufficient to permit a dividend of not less than one paisa in the rupee to each depositor. The statutory scheme was read as requiring these conditions to operate together, so repayment to the Corporation could not be deferred until full satisfaction of all depositors.

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Issues: Whether the Deposit Insurance and Credit Guarantee Corporation was entitled to repayment of the insured deposit amounts from the liquidator before other creditors and depositors were paid, and whether Regulation 22 made such repayment conditional upon the liquidator first being able to declare a dividend of not less than one paisa in the rupee to each depositor.

Analysis: Section 21 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 creates a repayment obligation in favour of the Corporation once deposits have been paid under the insurance scheme. The non obstante language in that provision displaces inconsistent law, but does not add a separate statutory concept of priority over all creditors. Regulation 22 prescribes the time and manner of repayment by requiring the liquidator, after making provision for expenses payable by that time, to repay the Corporation when the available realisations are sufficient to enable declaration of a dividend of not less than one paisa in the rupee to each depositor. The statutory scheme was read as requiring both conditions to coexist. The later appellate decision binding on the Court held that the Corporation must receive payment first, after liquidation expenses and provision for dividend, and that the liquidator cannot postpone repayment to the Corporation until all depositors are fully satisfied.

Conclusion: The Corporation's right to repayment was upheld, and the petitioners' challenge to repayment in favour of the Corporation before other claims was rejected.

Final Conclusion: The liquidator is bound to repay the Corporation in accordance with the statutory scheme after making provision for liquidation expenses and dividend requirements, and the contrary plea seeking to defer such repayment until full satisfaction of all depositors does not succeed.

Ratio Decidendi: Where a statute creates a repayment obligation backed by a non obstante clause and prescribes the time and manner of repayment by regulation, the liquidator must comply with that statutory sequence and cannot deny repayment to the beneficiary by reading into the provision a broader priority not expressed by the legislature.

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