Section 45B of the Banking Regulation Act, 1949: High Court Jurisdiction Over Claims in Bank Winding Up

Section 45B forms part of Part IIIA of the Banking Regulation Act, 1949, which contains special provisions for speedy disposal of winding-up proceedings concerning banking companies. The section gives the High Court exclusive jurisdiction over specified claims and questions connected with a banking company that is being wound up, subject to Section 45C.

What Section 45B provides

Section 45B - Power of High Court to decide all claims in respect of banking companies.

The High Court shall, save as otherwise expressly provided in section 45C, have exclusive jurisdiction to entertain and decide any claim made by or against a banking company which is being wound up (including claims by or against any of its branches in India) or any application made under section 391 of the Companies Act, 1956 by or in respect of a banking company, or any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in the course of the winding up of a banking company. The jurisdiction applies whether the claim, question or application arose before or after the winding-up order and whether before or after commencement of the Banking Companies (Amendment) Act, 1953.

The paragraph above is a faithful, reader-friendly presentation of the operative statutory text. For authoritative wording, consult the official India Code version linked in the resources section.

Meaning and scope of Section 45B

Section 45B centralises disputes connected with the winding up of a banking company before the High Court. Its purpose is to avoid fragmented proceedings in different courts and to enable claims, questions of priority and related legal or factual issues to be dealt with in the specialised winding-up process created by Part IIIA.

  • Exclusive jurisdiction: The High Court is the principal forum for claims covered by Section 45B.
  • Claims by or against the banking company: The provision extends to claims involving the banking company being wound up and its branches in India.
  • Questions of priority: Disputes about the ranking or priority of claims can be decided by the High Court.
  • Questions of law or fact: The section is broad enough to cover other questions arising in the course of winding up.
  • Pre-existing and later claims: The provision is framed to cover claims or questions arising before or after the winding-up order.
  • Subject to Section 45C: The opening words expressly preserve the special rules in Section 45C concerning transfer of pending proceedings.

Important legal context: Section 45A and Section 45C

Section 45A gives Part IIIA overriding effect where its provisions are inconsistent with other laws or instruments. Section 45B must therefore be read as part of that special statutory scheme for winding up banking companies.

Section 45C deals with transfer and treatment of proceedings pending in other courts when a winding-up order is made. Since Section 45B begins with the words "save as otherwise expressly provided in section 45C", both provisions should be read together.

Reference to the Companies Act, 1956

The present official text of Section 45B still contains a historical reference to Section 391 of the Companies Act, 1956. That Act has since been replaced by the Companies Act, 2013. Compromises and arrangements under the current company-law framework are principally dealt with in Section 230 of the Companies Act, 2013 and related provisions. This explanatory note does not alter or substitute the wording of Section 45B as printed in the Banking Regulation Act.

Why Section 45B matters

In a banking-company winding up, multiple creditors, depositors, debtors and other stakeholders may assert competing rights. Section 45B is designed to place the connected claims and questions before one superior court so that the winding-up process is not delayed by parallel litigation in several forums.

The section is therefore primarily jurisdictional. It determines which court is to entertain and decide the classes of claims and questions specified in the provision. The exact result in any individual matter will still depend on the nature of the claim, the winding-up order, the operation of Section 45C and other applicable provisions.

Legislative note

The reference to Section 391 of the Companies Act, 1956 was substituted by Act 95 of 1956, Section 14 and the Schedule, for the earlier reference to Section 153 of the Indian Companies Act, 1913, with effect from 14 January 1957.

Related provisions

For the surrounding statutory scheme, see Section 45A - Part IIIA to override other laws, Section 45C - Transfer of pending proceedings and Section 45D - Settlement of list of debtors.