1951 (10) TMI 15

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....NT Harnam Singh, J. - In C.O. No. 128 of 1950 and C.O. No. 136 of 1951 it is said that once it is established that a banking company is unable to pay its debts the court has no power to sanction a scheme of arrangement under section 153 of the Indian Companies Act, 1913, hereinafter referred to us the Act, in relation to the affairs of that banking company. In arguments counsel for the objec....

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....h has been repealed by Act X of 1949 is Part X-A of the Act. Indeed, section 45 of Act X of 1949 provides that the court may sanction a compromise or arrangement between a banking company and its creditors or any class of them or between such company and its members or any class of them when the compromise or arrangement is certified by the Reserve Bank as not being detrimental to the interests of....

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....e to pay its debts preserves the powers of the court under sections 162 and 271 of the Act and does not touch in any manner whatsoever the powers of the court under section 153 of the Act. On the other hand the express provisions of sections 39, 40, 41, 42, 43, 44 and 45 of the Banking Companies Act are in derogation of the provisions of law mentioned in those sections. In such cases the rule of l....

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....ere is nothing in section 38 of the Banking Companies Act or any other provision of Act X of 1949 showing that the provisions of section 38(1) are in derogation of section 153 of the Act in their application to a banking company which is unable to pay its debts. Clearly, section 38 does not touch the powers of the court to sanction a scheme of arrangement between a banking company and its creditor....