Section 45S of the Banking Regulation Act, 1949
Magistrate assistance to the official liquidator or special officer in taking charge of property, records and other assets of a banking company.
Statutory-heading note: The official heading of Section 45S still refers to the "Chief Presidency Magistrate and District Magistrate". However, the operative provisions were amended and presently refer to the Chief Metropolitan Magistrate or the Chief Judicial Magistrate. The historical heading is therefore retained only where identifying the section by its enacted title.
What Section 45S provides
Section 45S is part of Part IIIA of the Banking Regulation Act, 1949, which contains special provisions for the speedy disposal of winding-up proceedings involving banking companies. The section gives the official liquidator, or a special officer appointed under section 37(3), a statutory mechanism for obtaining possession and control of property, effects, books of account and other documents of a banking company.
In brief
- A written request may be made to the Chief Metropolitan Magistrate or Chief Judicial Magistrate having territorial jurisdiction.
- The Magistrate is to take possession of the relevant property, books of account or other documents.
- The property, books or documents are then to be forwarded to the official liquidator or special officer.
- Property and effects already in the Magistrate's possession may be sold on written request, with the net proceeds forwarded to the liquidator or special officer.
- As far as practicable, a sale under sub-section (2) is to be conducted by public auction.
- The Magistrate may take necessary steps and use, or cause to be used, such force as considered necessary to secure compliance with sub-section (1).
- An act done by the Magistrate in pursuance of Section 45S is protected from being called into question before a court or authority under sub-section (4).
Section 45S - Sub-section-wise explanation
Sub-section (1): Taking possession of property, books and documents
The official liquidator or the special officer appointed under section 37(3) may make a written request to the competent Chief Metropolitan Magistrate or Chief Judicial Magistrate where property, books of account or other documents of the banking company are situated or found. On such request, the Magistrate is required to take possession of those items and forward them to the official liquidator or special officer.
Sub-section (2): Sale of property and effects
Where property or effects are in the possession of the Magistrate, the official liquidator or special officer may request their sale in writing. The net sale proceeds are to be forwarded to the official liquidator or special officer. The statutory proviso requires the sale, as far as practicable, to be effected by public auction.
Sub-section (3): Steps and force necessary for compliance
For securing compliance with sub-section (1), the Chief Metropolitan Magistrate or Chief Judicial Magistrate may take, or cause to be taken, such steps and may use, or cause to be used, such force as the Magistrate considers necessary.
Sub-section (4): Protection of acts done under the section
The section provides that an act of the Chief Metropolitan Magistrate or Chief Judicial Magistrate done in pursuance of Section 45S shall not be called in question in any court or before any authority.
Important amendments reflected in Section 45S
1963 amendment: Act 55 of 1963 amended Section 45S with effect from 1 February 1964. Among other changes, it omitted the words limiting the provision to a banking company "which has been ordered to be wound up" and revised the provisions dealing with possession and sale.
1984 amendment: Act 1 of 1984 substituted the references to the earlier magistracy terminology with the present references to the Chief Metropolitan Magistrate or Chief Judicial Magistrate, with effect from 15 February 1984.
Why Section 45S matters in a banking-company winding up
The provision is designed to prevent delay in securing assets and records that may be necessary for an effective winding up. It gives the liquidator or special officer access to judicial assistance where property, books or documents have to be physically secured, transferred or sold. It therefore supports preservation and realisation of the banking company's assets during the winding-up process.
Related provisions
Section 45S should be read in the context of the neighbouring provisions in Part IIIA, including Section 45R on returns and information, Section 45T on enforcement of High Court orders and decisions and Section 45U on the High Court's rule-making power.
Official source
For the current consolidated text of the Banking Regulation Act, 1949, refer to the official India Code entry for the Banking Regulation Act, 1949.
Frequently asked questions
What is the purpose of Section 45S?
Its purpose is to help the official liquidator or special officer obtain possession and control of banking-company property, books of account and documents with the assistance of the competent Magistrate.
Which Magistrate is referred to in the operative text?
The operative text refers to the Chief Metropolitan Magistrate or the Chief Judicial Magistrate having jurisdiction over the place where the relevant property, books or documents are situated or found.
Can the Magistrate sell property under Section 45S?
Yes. On a written request from the official liquidator or special officer, property and effects in the Magistrate's possession may be sold, and the net proceeds are to be forwarded to the liquidator or special officer. As far as practicable, the sale is to be by public auction.
Legal note: This page is a general explanatory article on the statutory provision. The official text and applicable judicial decisions should be checked for use in a specific proceeding.