SUSPENSION OF BUSINESS AND WINDING UP OF BANKING COMPANIESCentral

Section 39A of The Banking Regulation Act, 1949

Application of Companies Act to liquidators.

1[39A. Application of Companies Act to liquidators.--(1) All the provisions of the Companies Act, 1956 (1 of 1956), relating to a liquidator, in so far as they are not inconsistent with this Act, shall apply to or in relation to a liquidator appointed under section 38A or section 39.

(2)Any reference to the "official liquidator" in this Part and Part IIIA shall be construed as including a reference to any liquidator of a banking company.]

Summary

All the rules in the Companies Act regarding liquidators apply to those handling bank closures, as long as they do not conflict with the 1949 Banking Act.
This applies to court liquidators attached to the High Court and liquidators appointed under special banking rules.
Whenever the term "official liquidator" is used in this part of the law, it refers to any person or bank acting as a liquidator for a banking company.
This section ensures that bank liquidators have clear legal powers and duties while allowing banking-specific rules to take priority.

Practical examples

1A liquidator appointed under Section 38A to close "Town Savings Bank" looks to the Companies Act to understand his general powers to sell the bank's property. He confirms that these powers are consistent with his specific duties under the Banking Regulation Act.

2The Reserve Bank, acting as a liquidator under Section 39, follows the reporting procedures found in the Companies Act because the banking law does not provide a different, conflicting rule for those specific reports.

FAQ

1. Which general law applies to liquidators under Section 39A of The Banking Regulation Act, 1949?

Under Section 39A of the 1949 Act, the provisions of the Companies Act, 1956, relating to liquidators apply as long as they are not inconsistent with the banking law.

2. Does Section 39A apply to liquidators appointed by the court under Section 38A?

Yes, Section 39A of the Banking Regulation Act specifically states it applies to liquidators appointed under either section 38A or section 39.

3. What does the term "official liquidator" mean in the context of winding up a bank?

According to Section 39A of the Act, it includes any liquidator appointed for a banking company.

Test yourself

1.Under Section 39A of The Banking Regulation Act, 1949, when do the Companies Act provisions NOT apply to a liquidator?

2.According to Section 39A of the 1949 Act, who is covered by the reference to an "official liquidator"?

3.Which specific sections of the 1949 Regulation Act are mentioned in Section 39A as appointing liquidators?

4.Does Section 39A of the banking law grant liquidators different powers depending on whether they are from the Reserve Bank or the High Court?

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