Appropriation and reprobation barred challenge to winding up, while insolvency materials justified liquidation of the bank.

Voluntary acceptance of dividend under a winding-up order can bar a later challenge where the benefit was taken under the very order attacked, the party had a real choice between inconsistent rights, and restitution would be impracticable because the company's business had ceased and the realised assets had already been distributed; on those facts, the appeal was not maintainable. The court also held that, on the materials including the banking regulator's report, liabilities exceeding realizable assets, and large unrecoverable advances, the bank was unable to pay its debts and the proposed scheme was unworkable; the winding-up order was therefore justified in law and on facts.

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Issues: (i) Whether acceptance of dividend after the winding-up order barred the appellants from prosecuting the appeal. (ii) Whether the bank was unable to pay its debts so as to justify winding up and rejection of the proposed scheme.

Issue (i): Whether acceptance of dividend after the winding-up order barred the appellants from prosecuting the appeal.

Analysis: The appellants had voluntarily received dividend under the winding-up order and had not challenged its validity at that time. The governing principle of approbation and reprobation applies where a party takes a benefit under an order that could not have been obtained except because of that order, has a real choice between inconsistent rights, and later seeks to repudiate the burden of the same order. On the facts, the dividend was derived from the winding-up itself and restitution would be impracticable because the bank's business had ceased, its assets had largely been sold, and the realised proceeds had already been distributed.

Conclusion: The acceptance of dividend precluded the appeal, and the appellants were not entitled to challenge the winding-up order.

Issue (ii): Whether the bank was unable to pay its debts so as to justify winding up and rejection of the proposed scheme.

Analysis: The court applied the special and general winding-up provisions governing banking companies and examined the Reserve Bank's report, the assets and liabilities, the large unsecured and sticky advances, and other adverse features in the bank's affairs. The materials showed that the liabilities exceeded the realizable assets and that the proposed scheme was not workable. The court also held that action could be taken suo motu where sufficient materials existed, and that the High Court was bound to order winding up once the bank's inability to pay debts was established.

Conclusion: The bank was unable to pay its debts, the proposed scheme was unworkable, and the winding-up order was in law and on facts.

Final Conclusion: The appeal was untenable both because the appellants were disentitled to maintain it after taking the dividend and because the record justified the winding up of the bank.

Ratio Decidendi: A party that voluntarily takes a benefit arising solely from a winding-up order and for which restitution has become impracticable cannot subsequently assail that order, and a banking company must be wound up where the court is satisfied on the materials that it is unable to pay its debts and any proposed scheme is unworkable.

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