W. Broome, J. - (1.) THE Chawla Bank Ltd. of Dehra Dun has filed this writ petition to challenge an order of moratorium issued by the Central Government under Sub -section (2) of Section 45 of the Banking Regulation Act, 1949, and an amalgamation scheme prepared by the Reserve Bank under Sub -section (4) of the same section for the amalgamation of the Chawla Bank with the New Bank of India.
(2.) THE sole ground on which the moratorium order and the amalgamation scheme are challenged is that they are in conflict with an order passed by the High Court on January 17, 1949, under Section 153 of the Indian Companies Act, sanctioning an arrangement agreed to by the shareholders and creditors of the Chawla Bank for the continuance of the said bank and for the satisfaction of its liabilities. The suggestion is that Section 45 of the Banking Regulation Act cannot operate to nullify orders that have been passed by the High Court in the jurisdiction conferred on it by the Companies Act. I see no force in this contention, however, for the wording of Section 45 makes it clear that this section was meant to override all other laws and agreements. Sub -section (1) of Section 45 runs thus : "45. (1) Notwithstanding anything contained in the foregoing provisions of this part or in any other law or any agreement or other instrument, for the time being in force, where it appears to the Reserve Bank that there is good reason so to do, the Reserve Bank may apply to the Central Government for an order of moratorium in respect of a banking company." And Sub -section (14) of Section 45 is in the following terms : " (14) The provisions of this section and of any scheme made under it shall have effect notwithstanding anything to the contrary contained in any other provisions of this Act or in any other law or any agreement, award or other instrument for the time being in force."
(3.) IT is clear from the above -quoted provisions that orders of moratorium and amalgamation schemes made under the section are to have effect notwithstanding any other law or any agreement, award or other instrument. Section 45 of the Banking Regulation Act thus expressly overrides Section 153 of the Companies Act, 1913, and the corresponding provision in Section 391 of the Companies Act, 1956; and arrangements or schemes enforced under these sections of the Companies Acts, can obviously not be put on a higher level than the sections of the Acts themselves and must also be deemed to be overridden by the provisions of Section 45 of the Banking Regulation Act. Whether the arrangement sanctioned by the High Court on January 17, 1949, is treated as an agreement between the petitioner -company, its shareholders and its creditors or whether it is treated as an order of the court under Section 153 of the Companies Act, 1913, the provisions of Section 45 of the Banking Regulation Act must nevertheless have effect in spite of such agreement or order.;