Subject NOT available

click here for IIIF manifest

REGISTERED No. D. 221

The Gazette of India

EXTRAORDINARY

PART II—Section Sub-section (ii) PUBLISHED BY AUTHORITY

No. 213] NEW DELHI, THURSDAY, AUGUST 20, 1964/SRAVANA 29, 1886

Separate paging is given to this part in order that it may be filed as a separate compilation

MINISTRY OF FINANCE

(Department of Economic Affairs)

NOTIFICATIONS

New Delhi, the 19th August 1964

S.O. 2910.—Whereas on the application of the Reserve Bank of India under sub-section (1) of section 45 of the Banking Companies Act, 1949 (Act 10 of 1949) the Central Government has made an order of moratorium in respect of the Southern Bank Ltd., Calcutta under sub-section (2) of the said section;

And whereas the Reserve Bank of India in exercise of the powers conferred by sub-section (4) of section 45 of the said Act has prepared a scheme for the amalgamation of the Southern Bank Ltd., with the United Industrial Bank Ltd;

And whereas the Reserve Bank after having sent the said scheme in draft to the banking companies concerned in accordance with the provisions of sub- section (6) of the said section and after having considered the suggestions and objections received in regard to the said scheme has modified that scheme and forwarded it to the Central Government for sanction;

Now, therefore, in exercise of the powers conferred by sub-section (7) of section 45 of the said Act, the Central Government hereby sanctions the scheme on and subject to the terms and conditions hereinafter mentioned.

(1) The Southern Bank Ltd. shall be the transferor bank and the United Industrial Bank Ltd. shall be the transfree bank.

Provided however that the provisions of this scheme, so far as they relate to the transferor bank, shall be applicable only to, or in relation to, the offices of the said bank in India,

(2) As from the date which the Central Government may specify for this purpose under sub-section (7) of section 45 of the said Act (hereinafter referred to as the prescribed date) all rights, powers, claims, demands, interests, autho- rities, privileges, benefits, assets and properties of the transferor bank, movable and immovable, including premises subject to all incidents of tenure and to the rents and other sums of money and covenants reserved by or contained in the leases or agreements under which (they are held, all office furniture, loose equipment, plant, apparatus and appliances, books, papers, stocks of stationery, other stocks and stores, all investments in stocks, shares and securities, all bills receivable hi hand and in transit, all cash in hand and on current or deposit account (including money at call or short notice) with banks, bullion, all book debts, mortgage debts and other debts with the benefit of securities, or any

( 731 )

guarantee therefor, all other, if any property rights and assets of every descrip- tion including all rights of action and benefit of all guarantees in connection with the business of the transferor bank shall, subject to the other provisions of this scheme, stand transferred to, and become the properties and assets of, the transferee bankj and as from the prescribed date all the liabilities, duties and obligations of the transferor bank shall be and shall become the liabilities, duties and obligations of the transferee bank to the extent and in the manner provided hereinafter.

Without prejudice to the generality of the foregoing provisions, all contracts, deeds, bonds, agreements, powers of attorney, grants of legal representation and other instruments of whatever nature subsisting or having effect immediately before the prescribed date shall be effective to the extent and in the manner hereinafter provided against or in favour of the transferee bank and may be acted upon as if instead of the transferor bank the transferee bank had been a party thereto or as if they had been issued in favour of the transferee bank.

If on the prescribed date any suit, appeal or other legal proceeding of what- ever nature by or against the transferor bank is pending, the same shall not abate, or be discontinued or be In any way prejudicially affected, but shall, sub- ject to the other provisions of this scheme, be prosecuted and enforced by or against the transferee bank.

(3) The books of the transferor bank shall be closed and balanced and balance sheets prepared in the first instance as at the close of business on the 22nd April 1964 and thereafter as at the close of business on the date immediately preceding the prescribed date and the balance sheets shall be got audited and certified by a chartered accountant or a firm of chartered accountants approved or nomin- ated by the Reserve Bank of India for the purpose.

A copy each of the balance sheets of the transferor bank prepared in accord- ance with the provisions of the foregoing paragraph shall be filed by the trans- feror bank with the Registrar of Companies as soon as possible after it has been received and thereafter the transferor bank shall not be required to prepare balance sheets or profit and loss accounts or to lay the same before its members or file copies thereof with the Registrar of Companies or to hold any annual general meeting for the purpose of considering the balance sheet and accounts or for any other purpose or to comply with the provisions of section 159 of the Companies Act, 1956. and it shall not thereafter be necessary for the Board of Directors of the transferor bank to meet as required by section 285 of that Act.

(4) I, The transferee bank shall, in consultation with the transferor bank, value the property and assets and reckon the liabilities of the transferor bank in accordance with the following provisions, namely:—

(a) Investments including Government securities shall be valued at the market rates prevailing on the day immediately preceding the pres- cribed date provided that the securities of the Central Government such as Post Office Certificates. Treasury Savings Deposit Certifi- cates and any other securities or certificates, issued under the small savings scheme of the Central Government shall be valued at their face value or the encashable value as on the said date, whichever is higher.

(b) Where the market value of any Government security such as the Zamindari abolition bonds or other similar security In respect of which the principal is payable in instalments is not ascertainable or is, for any reason, not considered as reflecting the fair value thereof or as otherwise appropriate, the security shall be valued at such an amount as is considered reasonable having regard to the ins- talments of principal and interest remaining to be paid, the period during which such instalments are payable, the yield of any secu- rity issued by the Government to which the security pertains and having the same or approximately the same maturity, and other re- levant factors.

(c) Where the market value of any security, share, debenture, bond or other investment is not considered reasonable by reason of its having been affected by abnormal factors, the investment may be valued on the basis of its average market value over any reasonable period. (d) Where the market value of any security, share, debenture, bond or other investment is not ascertainable, only such value, if any, shall be taken into account as is considered reasonable, having regard t"

the financial position of the issuing concern, the dividends paid by it during the preceding five years and other relevant factors.

(e) Premises and all other immovable properties and any assets acquired in satisfaction of claims shall be valued at their market value. (f) Furniture and fixtures, stationery in stock and other assets, if any. shall be valued at the written down value as per books of the realisable value as may be considered reasonable.

(g) Advances including bills purchased and discounted, book debts and sundry assets, will be scrutinised by the transferee bank and the securities, including guarantees, held as cover therefor examined and verified by the transferee bank. Thereafter, the advances, including portions thereof, will be classified into two categories, namely, "Ad- vances considered good and readily realisable" and "Advances con- sidered not readily realisable and/or bad or doubtful of recovery".

II. Liabilities for purposes of this scheme shall include all contingent liabi- lities which the transferee bank may reasonably be expected or required to meet out of its own resources on or after the prescribed date.

III. Where the valuation of any asset cannot be determined on the prescribed date, if may, with the approval of the Reserve Bank of India be treated partly or wholly as an asset realisable at a later date.

In the event of any disagreement between the transferee bank and the trans- feror bank as regards the valuation of anv asset or the classification of any advance or the determination of any liability the matter shall be referred to the Reserve Bank of India, whose opinion shall be final, provided that until such an opinion is received, the valuation of the item or portion thereof by the trans- feree bank shall provisionally be adopted for the purpose of this scheme.

It shall be competent for the Reserve Bank in the event of its becoming neces- sary to do so, to ootain such technical advice as it may consider to be appropriate in connection with the valuation of any such item of asset or determination of any such item of liability, and the cost of obtaining such advice shall be pay- able in full out of the assets of the transferor bank.

The valuation of the assets and the determination of the liabilities in accord- ance with the foregoing provisions shall be binding on both the banks and the members and creditors thereof.

(5) In consideration of the transfer of the oropertv and the assets of the -transferor bank to the transferee bank the transferee bank shall discharge the liabilities of the transferor bank to the extent mentioned in this and the succeed- ing paragraphs.

(a) Any sums deposited by any employee of the transferor bank with that bank as staff security deDositft together with interest, if any. accrued thereon upto the prescribed date and all other outside liabilities as on the prescribed date excluding deposits shall be paid or provided for in full.

Explanation:—For the purposes of this paragraph, interest payable on a deposit up to the Described date shall be regarded as part of the concerned deposit,

(b) In respect of every savings bank account or current account or any other deposit including a fixed deposit, cash certificate, monthly de- posit deposit payable at call or short notice or any other deposit by whatever name called with the transferor bank and every other account not covered bv clause (a), including interest to the extent payable under this scheme, the transferee bank shall open with It- self on the prescribed date a corresponding and similar account in the name of the respective holder(s) thereof crediting thereto the pro ratai share available in respect of each of the accounts out oi the assets referred to in paragraph (4) as valued for the purposes of this scheme on the prescribed date, after excluding from the said assets as so valued the advances considered not readily realisable or bad or doubtful of recovery, any asset or portion of an asset not valued on the prescribed date and any amount needed for the pay- ments or provisions mentioned at clause (a) above and after adding

to the said assets as so valued the aggregate amount of the pay- ments made in terms of clause (i) of paragraph 2 of the morato- rium order dated the 22nd April 1964 issued to the transferor bank:

Provided that any payment made from a deposit account on or after the 23rd April 1964 and before the prescribed date, shall be re- ckoned towards the amount to be credited under this sub-para- graph and, accordingly the amount to be credited shall be the •pro-rata share less the amount of such payment:

Provided, however, that where the transferee bank entertains a reason- able doubt about the correctness of the entries madiLin any parti- cular account, it may. with the approval of the Reserve Bank, with- hold the credit to be made in that account in terms of clause (b) above till the transferee bank is able to ascertain the correct bal- ance in such account.

Explanation.—The term 'pro rata' shall, insofar as it occurs in this para- graph, mean 'in proportion to the respective amounts remaining due as at the close of business on the 22nd April 1964 (inclusive of interest payable up to that date)' and shall, in so far as it occurs elsewhere in this scheme, mean 'in proportion to the respective amounts remaining due at the time of the payment or distribu- tion'.

(c) After the credits referred to in clause (b) above have been afforded, the transferee bank shall, with the least possible delay but in any case not later than three months from the prescribed date, furnish to the Deposit Insurance Corporation established under the Deposit Insurance Corporation Act, 1961 (hereinafter referred to as the Cor- poration) a list complying in all respects with the requirements of sub-section (1) of section 18 of that Act and thereafter whenever amounts referred to in sub-section (2) of section 18 of that Act are received from the Corporation, the transferee bank shall credit each of the accounts referred to in clause (b) above, within seven days from the date or dates on which the amounts are received, to the extent of the sums due to that account in accordance with sub- section (2) of section 18 of that Act:

Provided that—

(a) if any account referred to in clause (b) has been closed or has matured for payment at the time when any amount for credit to that account is received from the Corporation, the payment to the person entitled to the said amount shall be made by the transferee bank in cash;

(b) in care the person entitled to any amount referred to in clause (b) cannot be found or is not readily traceable, provision for the amount due to such person shall be made and accounted for sepa- rately on the books of the Corporation itself and it shall not be necessary for the Corporation to pay the amounts to the transferee bank unless the person entitled to amount is found or traced and the Corporation has decided to make the payment in respect of that person through the transferee bank.

(d) On the prescribed date, the entire amount of the paid-up capital and reserves of the transferor bank shall be treated as provision for bad and doubtful debts and depreciation in other assets of the transferor bank and the rights of. the members of the transferor bank shall, in relation to the transferee bank, be as provided for in paragraph (6) below.

3) In respect of

(a) every account mentioned in clause (b) of the preceding paragraph, th" balance in the account, if any, remaining uncredited in terms of that clause and clause (c) and

(b) every share in the transferor bank, the amount which was treated aa paid-up towards share capital by or on behalf of each shareholder Immediately before the prescribed dote and/or the amount paid on account of the calls made by the transferee bank In pursuance of clause (1) below

ahall be treated as a collection account and shall be entered as such on the books of the transferee bank and payments against the account shall be made in the following manner, namely: —

(i; the transferee bank ahall call upon every person who an the.prescribed date was registered as the holder of a share in the transferor bank (or who would have been entitled to be so registered) to pay within three months from such date as. may be specified the uncalled am- ount remaining unpaid by him in respect of such shares and the calls in arrears, iJC any and the transferee bank shall take all avail- able steps having regard to the circumstances of each case to demand and enforce the payment of the amounts due under this clause, to- gether with interest at six per cent per annum for the period of the default;

(ii) the transferee bank shall, in respect of the advances, bills purchased and discounted, book debts and sundry debts and other assets, which are classified as "Advances considered not readily realisable and/or bad or doubtful of recovery", or which are or may be realisable wholly or partly after the precribed date in terms of paragraph (4) above, take all available steps having regard to the circumstances of each case to demand and enforce payment, provided, however, that if the amount of a debt or asset exceeds Rs. 3,000, the transferee bank shall not except, with the approval of the Reserve Bank of India,

(a; enter into a compromise or arrangement with the debtor or any other person or write off any such debt or asset;

(b) sell or otherwise dispose of any securities transferred to it or any asset taken over by it.

(iii) the transferee bank shall in addition take all available steps having regard to the circumstances of each case to demand and enforce the payment of the amounts, if any, awarded as damages by the High Court against any promoter, director, manager or other officer of the transferor bank under section 45L of the Banking Companies Act, 1949, read with section 45H thereof and also with section 543 of the Companies Act, 1936:

(iv) the transferee bank may, out of the realisations effected by it on ac- count of the items mentioned in clauses (i), (ii) and (iii) above, make payment or provision in respect of any contingent liability to the extent that the provision made therefor under paragraph (5) (a) proves to be inadequate, as also, with the prior approval of the Reserve Bank, in respect of any liability whether contingent or absolute which was not assessed in terms of paragraph (4) above and has arisen or been discovered on or after the prescribed date;

(V) the transferee bank shall, out of the realisations effected by it on ac- count of the Items mentioned in clauses (i), (ii) and (iii) above after deducting therefrom the expenditure incurred for the purpose and, with the approval of the Reserve Bank of India, such other expenses as may be considered reasonable and the amount appropriated there- from in terms of clause (iv) above, or out of the balance, if any, which may be available from out of the provision in respect of con- tingent liabilities as reckoned for the purposes of this scheme after the extent of such liabilities has finally been ascertained,—

(a) pay to the Corporation the amount received by the transferee bank from the Corporation under sub-section (2) of section 18 of the Deposit Insurance Corporation Act, 1961 and the amount, if any, provided for by the Corporation; and

(b) pay in the case of depositors in respect of whom no amounts have been received by the transferee bank from the Corporation, the amounts due in respect of the collection accounts, and in the case of depositors in respect of whom any amounts have been received by the transferee bank from the Corporation or have been pro- vided for by the Corporation the balance if any due to them in

their collection accounts after the amounts due from the said ac- counts to the Corporation in respect of the payment made or pro- vided for by the Cortioration have first been paid in accordance with the provisions of sub-clause (a) above:

Provided that the amount due to the Corporation shall, if it becomes necessary so to do, be provided for on the books of the transferee bank and be paid to the Corporation in the manner specified in clause (b) of regulation 22 of the Deposit Insurance Corporation General Regulations, 1961:

Provided further that the transferee bank shall make the payments referred to In clause (h) above,—

(1) if the corresponding or similar account mentioned in clause (b) of paragraph (5) has not been closed or has not matured for pay- ment, by credit to that account, and

(ii) if the said account has been closed or has matured for payment, in cash

(vl) the amounts due to the Corporation In terms of sub-clause (a) of clause (v) above and the amounts due to the collection accounts of the deposi- tors in terms of sub-clause (b) of that clause shall rank equally amonff themselves, and if they cannot be paid in full shall abate in equal proportions;

Cvii) after the payment referred to In clause (v) of this paragranh have been made or provided for in full, the transferee bank shall, out of the balance of the amounts referred to in clause (v) which may be avail- able to it, make pavments -pro rata towards the amounts, if any due to the accounts of the former shareholders of the transferor bank:

Provided that the transferee bank shall dive to any person to whom any payment may be due under this clause such reasonable notice, not exceeding three months and not being less than one month as it may consider appropriate of the payment being due, and

(a) if during the period of this notice a request has not been received In writing for the payment of the amount due in cash and if the amount of the payment due is also not less than the highest clos- ing price of an ordinary share in the transferee hank as emoted on any recognised stock exchange on or immediatelv before the date on which the notice is Issued, or where the ordinary share of the transferee bank Is not quoted on any recognised stock exchange the price of the share as determined by the Reserve Bank, the transferee bank shall allot to the pavee a sharp or shares in the transferee bank to the extent uossible and disburse in cash the balance, If any, of the amount which mav be due; and

Cb) if the conditions mentioned in sub-clause (a) above are not fulfilled the transferee bank shall disburse the amount in cash.

Provided further that—

(a) the allotment of the shares or the payments aforesaid shall in each case be made before the end of six months from the date on which notice of the payment falling due is deemed to have been served In accordance with the provisions of this scheme; and

(b) the share capital of the transferee bank shall be deemed to have been Increased, and notwithstanding the provisions of anv enact- ment, regulation or other Instrument it shall also be lawful for the transferee bank to issue the shares. In the manner and to the extent specified for the purposes of this scheme;

(viii) the amounts due to the collection accounts referred to in this oaraeranh shall be deemed to be a liability of the transferee bank only to the extent provided for in this scheme;

fix) on the expirv of twelve vears from the prescribed date or such earlier period as the Central Government after consulting the Reserve Bank of Tndla may specify for this purpose, any Item referred to In clause (ii) of this paragraph which may not have been realised by that date

shall be valued by the transferee batik in consultation with the Reserve Bank and the transferee bank shall distribute any amount or amounts determined in the light of that valuation after deducting therefrom rtrst any sum necessary for meeting the liabilities referred to in clause (iv) of this paragrapn which may remain unsatisfied as on that date in the order and tnc manner provided in clauses (v;, (vi) and (vil) above.

CO Notwithstanding anything to the contrary contained in any contract, express or implied, no interest shall accrue on account of a deposit or other liability in any account mentioned in paragraphs (5) and (qj after the date of the moratorium except in respect of the stall' security deposits mentioned in paragraph (5) (a) and interest shall be paid only in respect of the new accounts opened with the transferee bank in terms of paragraph (5) and credited in accordance with the provisions of that or the next succeeding paragraph ana only at such rates as the transferee bank may allow.

(8) No depositor or other creditor of the transferor bank shall be entitled to make any demand against tnc transferor bank or the transferee bank in respect of any liability of the transferor bank to him except to the extent prescribed by this schema.

(9) No suit or other legal proceedings shall lie against the Central Government the Keseivc Bam:: of India or the transferee or the transferor banks for anything wnich in in good faith done or intended to be done in pursuance of this scheme.

(10) All the employees of the transferor bank other than those specified in the schedule referred to in the succeeding paragrapn shall continue in service and the deemed to have been appointed by tne transferee bank at the same remuneration and on the same terms and conditions of service as were applicable to such employees immediately before the Ii3rd April 19(14:

Provided that the employees of the transferor bank who have by notice in writing Riven to the transferor or the transferee bank at any time before the expiry oi one month next following the date on which this scheme has been sanctioned by the Central Government, intimated their intention of not becoming employees of the transferee bank, shall be entitled to the payment of such com pensation, if any, under the provisions of the Industrial Disputes Act 1947 and such pension, gratuity, provident fund and other retirement benefits as mav be ordinarily admissible under the rules or authorisations of the transferor bank immediately before the 23rd April 1964:

Provided further that the transferee bank shall in respect of the employees of the transferor bank who are deemed to have been appointed aa employees of the transferee bank be deemed also to have taken over liability for the payment of retrenchment compensation in the event of their being retrenched while in th£ service of the transferee bank on the basis that their srvice has been continuous and has not been interrupted by their transfer to the transferee bank_L o n u n u ⁰ U !>

( U-)u^h? ?e r s o ns specified in the schedule annexed to this scheme shall on the prescribed date cease to be the employees of the transferor bank and notwithstand- ing anything contained in any. law for the time being In force or any anwrnmt or contract, the persons so specified shall be entitled to and only to such pension gratuity provident fund and other retirement benefits as may be ordinarily admissl before ft™ ApriMge^® °T a u t h o r i s Q t i o ns ot t he transferor bank immediately

"^ri^SBi^SVS^ST£ aann

y S a rj ^ce^nfbfs^ch8^

Provided further that nothing herein shall be deemed to prevent the transferep bank from re-employliw any person whose name has been specified in the schedule^

(12) The transferee bank shall on the expiry of a period not longer than three years from the date on which this scheme is sanctioned, pay or grant to the employees of the transferor bank the same remuneration and the same terms and conditions of service as are applicable to the employees of correspond!^ rank or status of the transferee bank subject to the qqualiflcations and experience of

the said employees of the transferor bank being the same as or equivalent to those of such other employees of the transferee bank:

Provided that if any doubt or difference aris.es as to whether the qualifications or experience of any of the said employees are the same as or equivalent to the qualifications and experience of the other employees of corresponding rank or status of the transferee bank or as to the procedure or principles to be adopted for the fixation of the pay of the employees fai the scales of pay of the transferee bank, the doubt, or difference shall be referred to the Reserve Bank of India whose decision thereon shall be final.

(13) The trustees or administrators of any provident fund constituted for the employees of the transferor bank or as the case may be the transferor bank shall on or as soon as possible after the prescribed d.ate transfer to the trustees of the employees' provident fund constituted for the transferee bank, or otherwise as the transferee bank may direct, all the monies and investments held in trust for the benefit of the employees of the transferor bank:

Provided that such latter trustees shall not be liable for any deficiency in the value of investments, or in respect of any act, neglect, or default done before the prescribed date.

(14) The transferee bank shall submit to the Reserve Bank of India such state- ments and Information as may be required by the Reserve Bank of India from time to time regarding the implementation of this scheme.

(15) Any notice or other communication required, to be given by the transferee bank shall be considered to be duly given, if addressed and sent by pre-paid ordinary post to the addressee at the address registered in the books of the trans- feror bank, until a new address is registered In the books of the transferee bank, and such notice shall be deemed to be served on the expiry of fortyeight hours after it has been posted. Any notice or communication which is of general interest shall be advertised in addition in one or more daily newspapers which may be in circulation at the places where the transferor bank was transacting its business.

(18) If any doubt arises In interpreting any of the provisions of this scheme, the matter shall be referred to the Reserve Bank of India and its opinion shall be conclusive and binding on both the transferee and transferor banks, and also on all the members, depositors and other creditors and employees of each of these banks and on any other person having any rights or liability in relation to any of these banks.

(17) If any difficulty arises in giving effect to the provisions of this scheme, the Central Government may issue to the transferor and the transferee banks or to either of them such directions not inconsistent with this scheme as may appear to the Central Government, after consulting the Reserve Bank of India, to be necessary or appropriate for the purpose of removing the difficulty.

Schedule attached to and forming part of the scheme for the amalgamation of the Southern Bank Ltd. as sanctioned by the Central Government under sub- section (7) of section 45 of the Banking Companies Act, 1949 (10 of 1949).

Name of the employee

Designation in the transferor bank

1. 2. 2. 4.

Shri Narayan Chandra Banerjee Shri Chinta Haran Banerjee Shn Jitendra Nath Mukherjee Shri Brojendra Kumar Poddar

General Manager Chief Accountant Law Officer Officer.

[No. 17(9)-BC/64.]

SO Z9H. In pursuance of sub-section (7) oi section 45 or trie Banking Companies Act, 1949 (10 of 1949) the Central Government hereby specifies the 24th August 1964 as the prescribed date in relation to the scheme for the amalga- mation of the Southern Bank Ltd. with the United Industrial Bank Ltd. which has been sanctioned by the Central GovemmenJ under the provisions of the said sub-section.

[ No p 1 7 ( 9 ).B C / f l 4 ( I) -,

B. J. HEERJEE, Under Secy.

PRINTED DM INBIA BY THE OENI21AL MANAGER, GOVBUNMENT Or INDIA PRESS,

NEW DELHI AND PUBLISHED BY THE MANAGER OF PUBLICATIONS, DELHI, 1 9 64