TaxTMI 
TaxTMI 
1985 (7) TMI 318
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....close of business on April 27, 1985, till August 28, 1985. The petitioners receive foreign contributions through some of the branches of the Bank of Cochin and have registered themselves under section 6 of the Foreign Contributions (Regulation) Act, 1976. They thus maintain accounts in some specified branches of the bank. The petitioners were, however, prevented from operating these accounts and withdrawing any amounts while the moratorium was in force. They have, therefore, filed these writ petitions for appropriate reliefs. Learned counsel, Shri M. I. Joseph, appearing for the petitioners in all these cases; raised only two contentions : (1)The moratorium ordered under section 45(1) of the Banking Regulation Act cannot affect the....
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....rwise provided by any directions given by the Central Government in the order made by it under sub-section (2) or at any time thereafter, the banking company shall not, during the period of moratorium, make any payment to any depositors or discharge any liabilities or obligations to any other creditors." 6. The notification* ordering moratorium, in so far as it is relevant for our purpose, is extracted below : "Government of India Ministry of Finance Department of Economic Affairs (Banking Division) New Delhi, the 27th April, 1985, Vaisaka 7, 1907 (Saka) Notification In exercise of the powers conferred by sub-section (2) of section 45 of the Banking Regulation Act, 1949 (10 of 1949), the Central Government, after con....
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.... any other person) does not exceed Rs. 2,500 and provided further that no amount shall be paid to any depositor who is indebted to the bank in any way..." The moratorium itself is not under challenge. In fact, the petitioners support the moratorium as a statutory protection for the depositors. The Foreign Exchange Regulation Act, 1973, defines "foreign exchange" in section 2(h) thus: "foreign exchange" means foreign currency and includes- (i)all deposits, credits and balances payable in any foreign currency, and any drafts, traveller's cheques, letters of credit and bills of exchange, expressed or drawn in Indian currency but payable in any foreign currency; (ii)any instrument payable, at the option of the drawee or holder th....
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....s of banking. Thus, the bank can buy and sell foreign exchange including foreign bank notes, collect and deal in bills of exchange, receive valuables on deposit or for safe custody and transact several forms of business. The moratorium contemplated under section 45(1) of the Act is "in respect of a banking company" and not confined to banking business only. Moratorium, as the word signifies, is a suspension of activity, or a temporary ban on the performance of legal obligations. Section 45(3) of the Banking Regulation Act, therefore, enjoins that the banking company shall not, during the period of moratorium, make any payment to any depositor or discharge any liabilities or obligations to any creditor, except as otherwise directed by the Ce....
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....t entitled to withdraw any amount from their accounts in any branch of this bank except to the extent allowed by the Government itself, even when the amounts in deposit are foreign contributions and the provisions of the Foreign Exchange Regulation Act are also attracted. The first point urged has thus no substance. The second point is equally without merit. We are not considering whether the petitioners belong to a religious denomination entitled to the protection under article 26(d) of the Constitution. Even assuming that they belong to a religious denomination, there is no infraction of the guarantee under this article. Under article 26(d), every religious denomination or any section thereof shall have the right to administer its p....