Central Bank Act, 1971

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Proceedings in relation to deposits under section 7.

29.—(1) Whenever a person obtains a judgment, order or decree in any court in the State against the holder of a licence for payment of a deposit (including a deposit on current account) maintained by or for him with the holder, or institutes proceedings against the holder claiming such payment, the person or any other person maintaining a deposit with the holder—

(a) may by motion ex parte apply to the Court for an order under subsection (2) of this section, and

(b) on satisfying the registrar or clerk of the court in which the judgment, order or decree was obtained or the proceedings were instituted that he proposes to make an application under this section, shall be entitled to obtain a certificate signed by the registrar or clerk and stating that the judgment, order or decree has been obtained or that the proceedings were instituted, as the case may be, and the certificate shall be evidence of the facts so stated therein.

(2) Where an application is made under subsection (1) of this section—

(a) the Court may by order direct that the deposit or any part thereof maintained in the Bank by the holder of a licence to whom the application relates under section 7 of this Act be not released during such period as the Court may deem proper and specify in the order, and

(b) if the person making the application has obtained a judgment, order or decree against the holder and it appears to the Court, after such enquiry as it deems appropriate, either—

(i) that it is unlikely that further claims will be made against the deposit in respect of sums then owed by the holder, or

(ii) that, if such claims are made, the deposit is sufficient to meet them in full,

the Court may by order direct that the sum specified in the judgment, order or decree (as the case may be), with or without the costs of the application, shall be paid to the person out of the deposit.

(3) Where an order is made under subsection (2) (a) of this section, the Court may also make an order directing either—

(a) that persons carrying on banking business shall not, except subject to such conditions or in such circumstances as may be specified in the order, make any payment out of any banking account kept in the name of the person against whom the order is made, or

(b) that a specified person or persons carrying on banking business shall not, except subject to such conditions or in such circumstances as may be specified in the order, make any payment out of any banking account or out of a specified banking account or type of banking account kept in the name of the person against whom the order is made by the person or persons specified.

(4) Where—

(a) a judgment, order or decree of the kind referred to in subsection (1) of this section having been obtained against the holder of a licence, an order is made under subsection (2) (a) of this section on the application of the person who obtained the judgment, order or decree, or

(b) an order is made under subsection (3) of this section,

the following provisions shall have effect—

(i) in case the holder is a company, the holder shall be deemed, for the purpose of the law relating to companies, to be unable to pay its debts,

(ii) in case the holder is a partnership, each of the partners shall be deemed, for the purpose of the law relating to bankruptcy, to have committed an act of bankruptcy,

(iii) in any other case, the holder shall be deemed, for the purpose of the law relating to bankruptcy, to have committed an act of bankruptcy.

(5) If an appeal is instituted in the Supreme Court—

(a) against an order of the Court made under subsection (2) (a) or subsection (3) of this section on the application of a person who has obtained a judgment, order or decree of the kind referred to in subsection (1) of this section, or

(b) against an order of the Court made under subsection (3) of this section on the application of a person who has instituted proceedings of the kind referred to in subsection (1) of this section,

subsection (6) and, where appropriate, subsection (7) of this section shall apply.

(6) The Supreme Court or the Court may by order postpone the application of subsection (4) of this section for such period and, subject to subsection (7) of this section in the case of an appeal referred to in subsection (5) (a) of this section, on such terms as the court concerned may fix and specify in the order.

(7) If the Supreme Court or the Court makes an order under subsection (6) of this section in the case of an appeal referred to in subsection (5) (a) of this section, the court concerned may require the holder of a licence to whom the order relates either, as the court thinks fit, to lodge in court an amount equal to the amount of all the moneys due under the judgment, order or decree (or such lesser amount as the court may direct) or to give such security as the court may direct for the payment of all such moneys, together with, in either case, such further sum or security for costs of the appeal as the court shall consider just.

(8) (a) In addition to or in lieu of making an order under subsection (3) of this section, the Court may, notwithstanding anything contained in the law relating to bankruptcy or the law relating to companies, of its own motion and after giving to the holder of a licence against whom the order is made or sought, and to any other person to whom it considers notice should be given, such notice as it considers reasonable—

(i) in case the holder is a company, make an order for its winding up and for the appointment of the Official Assignee as liquidator of the company.

(ii) in case the holder is a partnership, by order adjudicate each of the partners bankrupt,

(iii) in any other case, adjudicate the holder bankrupt.

(b) Where the Official Assignee is appointed liquidator under paragraph (a) of this subsection—

(i) the provisions of paragraphs (a) and (d) of section 228 of the Companies Act, 1963 , shall not apply to him,

(ii) the exercise of his powers and the performance of his duties as liquidator (including the making of payments from and the distribution of any deposit maintained under section 7 of this Act which becomes vested in him) shall for all purposes be deemed to be business assigned to the Office of the Official Assignee in Bankruptcy and transacted therein.

(9) Where, in proceedings under this section, the holder of a licence is adjudicated bankrupt, the law relating to bankruptcy (including this Act) shall apply in the same way as if the holder had been adjudicated bankrupt on a petition of bankruptcy under that law and as if for any reference in that law to the presentation or filing of a petition of bankruptcy there were substituted a reference to the making of the order of adjudication under this section.

(10) Where, in proceedings under this section in which the holder of a licence against whom they are brought is a company, a winding up order is made, the law relating to companies (including this Act) shall apply in the same way as if the order had been made on a winding up petition under that law and as if for any reference in that law to the presentation of the winding up petition there were substituted a reference to the making of the winding up order under this section.

(11) An order under subsection (2) (a), (3) or (6) of this section may be revoked or varied by the Court or the Supreme Court, as the case may be.

(12) The whole or any part of proceedings under this section or of an appeal in relation thereto may be heard in chambers.

(13) In this and in the next following section “the Official Assignee” means the person who is for the time being the Official Assignee in Bankruptcy.