Section 43 of the Banking Regulation Act, 1949: Booked Depositors' Credits to Be Deemed Proved

Section 43 of the Banking Regulation Act, 1949 provides a special rule for depositors when a banking company is being wound up. It treats the amount shown to a depositor's credit in the bank's books as a claim already filed and, subject to the official liquidator showing a reason for doubt, as a claim proved before the High Court.

Statutory text of Section 43

43. Booked depositors' credits to be deemed proved. - In any proceeding for the winding up of a banking company, every depositor of the banking company shall be deemed to have filed his claim for the amount shown in the books of the banking company as standing to his credit and, notwithstanding anything to the contrary contained in section 474 of the Companies Act, 1956 (1 of 1956), the High Court shall presume such claims to have been proved, unless the official liquidator shows that there is reason for doubting its correctness.

Meaning and effect of Section 43

The provision reduces the procedural burden on depositors in the winding up of a banking company. A depositor does not have to establish from the beginning that the balance recorded in the banking company's books is due to him or her. The recorded credit is treated as a filed claim and is presumed to be proved.

  • Automatic filing of claim: the depositor is deemed to have filed a claim for the amount shown to his or her credit in the bank's books.
  • Presumption of proof: the High Court is required to presume that such claim has been proved.
  • Exception: the presumption may be displaced where the official liquidator shows a reason for doubting the correctness of the recorded credit.
  • Winding-up context: Section 43 operates in proceedings for winding up of a banking company.

Reference to the Companies Act, 1956

The currently published India Code text of Section 43 continues to refer to section 474 of the Companies Act, 1956. This page reproduces the statutory wording as published in the official text of the Banking Regulation Act, 1949 and does not substitute a different provision merely because the Companies Act, 2013 is now the principal companies legislation.

Amendment history

Section 43 was substituted by section 8 of the Banking Companies (Amendment) Act, 1953 (Act 52 of 1953), with effect from 30 December 1953.

The reference to section 474 of the Companies Act, 1956 was substituted by section 14 and the Schedule to Act 95 of 1956 for the earlier reference to section 191 of the Indian Companies Act, 1913.

Official source

For the authoritative text and subsequent amendments, refer to the Banking Regulation Act, 1949 on India Code.