Judgment:
Sudhir Narain, J.
1. This writ petition is directed against the order dated 7.9.2000 passed by respondent No. 2 rejecting the Insolvency petition filed by the petitioner and the order of the appellate court dated 1.3.2001 affirming the said order in appeal.
2. Briefly stated, the facts arethat Punjab National Bank, BranchStation Road, Moradabad, respondentNo. 3, (in short the 'Bank') filed suitNo. 717 of 1991 for recovery ofamount against the petitioner as wellas M/s. Shivalik International andothers. The suit was decreed on10.2.1992 for Rs. 20,72.000.
3. The petitioner filed an insolvency petition before respondent No. 2 for declaring insolvent with the allegation that Rs. 20,72.000 is due to Punjab National Bank. He has 1/72 share in the house situate in Seohara Town, district Bijnor, the value of which is hardly Rs. 1,000 and his wearing clothes and other assets are valued at Rs. 2,000. The bank raised an objection that insolvency petition is not maintainable against the bank in view of Section 8 of the Provincial Insolvency Act, 1920, which reads as under :
'8. Exemption of corporations, etc. from insolvency proceedings.--No insolvency petition shall be presented against any corporation or against any association or company registered under any enactment for the time being in force.'
4. The objection of the bank was accepted by the respondent No. 1 and insolvency petition was rejected by order dated 7.1.2001. The petitioner filed appeal against this order and the appellate court dismissed the appeal vide order dated 1.3.2001.
5. The question is whether the bank can claim exemption from Insolvency proceedings under Section 8 of the Act. Any company registered under any enactment is exempted from the insolvency proceedings. The bank was registered as a banking company as defined under Section 5(c) of the Banking Regulation Act, 1949 (Act No. 10 of 1949) which reads as under :
'5. (c) 'banking company means any company which transacts the business of banking in India ;'
6. Clause (d) of Section 5 of Act No. 10 of 1949 defines 'company' means any company as defined in Section 3 of the Companies Act, 1956 ; and includes a foreign company within the meaning of Section 591 of that Act. Section 2 of the Act No. 10 of 1949 provides that the provisions of Act shall be in addition to, and not, save as hereinafter expressly provided, in derogation of the Companies Act, 1956, and any other law for the time being in force.
7. After the enforcement of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Act No. 5 of 1970), all the banking companies including the foreign companies registered under the Companies Act, 1956, were nationalised and more than 51% shares were taken over by the Government of India and the banking companies became the body corporate under Section 2(d) of Act No. 5 of 1970. Clause (d) defines 'corresponding new bank in relation to existing bank' means a body corporate specified against such bank in column 2 of I Schedule. In the first Schedule 'Punjab National Bank Ltd.' is in the first column and in the second column it has been referred to as 'Punjab National Bank'. Section 4 of 1970 Act provides that on commencement of the Act. undertaking of every existing bank shall be transferred to and shall vest in the corresponding new bank.
8. In view of the aforesaidprovision of law, the Punjab NationalBank is a Government Companyunder Section 617 of Companies Act.1956. The view taken by the courtsbelow that the Bank is registeredcompany and, therefore, it isexempted from insolvencyproceedings does not suffer from anyillegality.
9. The writ petition is accordingly dismissed.