LexDEPOSIT INSURANCE & CREDIT GUARANTEE CORPORATION versus RAGUPATHI RAGAVAN & ORS.
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[2015] 8 S.C.R. 1°24 A DEPOSIT INSURANCE & CREDIT GUARANTEE 8 CORPORATION v. RAGUPATHI RAGAVAN & ORS. (Civil Appeal No. 1035 of 2008) JULY01, 2015 [ANIL R. DAVE AND DIPAK MISRA, JJ.] c Deposit Insurance and Credit Guarantee Corporation Act, 1961- ss. 3(1), 16, 21- Deposits made by depositors with the banking companies - Insurance by appel/ant- Corporation - Bank in financial difficulties - Liability of the Corporation - Amount insured in respect of each depositor D was only Rs. 1 lakh as such all the depositors not paid the entire amount deposited with the bank- Writ petition by some of the depositors seeking payment of amount which exceeded Rs. 1 lakh from the Official Liquidator- Direction by Single Judge to the Special Officer to pay the amount deposited by E the depositors with accrued interest- Said petitions disposed of at an admission stage, even before any reply was filed on behalf of the Official Liquidator - Writ Appeal by Official Liquidator as well as Special Officer of the Bank- High Court held that the amount which was with the Official Liquidator F should have been distributed among the depositors and the Corporation had no preferential right~ On appeal, held: High Court or any other authority has no power to direct payment in excess of Rs. 1 lakh by ignoring statutory provisions of the Act and the Regulations - High Cou1 exceeded its authority G while giving the said direction to the Official Liquidator- Thus, order passed by the courts below set aside - Official Liquidator and Special Officer to act in accordance with the statutory provisions - Deposit Insurance and Credit H Guarantee Corporation General Regulations, 1961 - Reg 22. 124 DEPOSIT INSURANCE & CREDIT GUARANTEE CORP. 125 v. RAGUPATHI RAGAVAN Disposing of the appeals, the Court A HELD: 1.1 As per the provisions of Section 16(1) of the Deposit Insurance and Credit Guarantee Corporation Act, a sum of Rs.1 lakh is being insured or guaranteed in respect of each depositor. So a depositor B is safe and he has not to wash his hands off his deposit if the amount deposited by him is less than Rs.1 lakh. The Official Liquidator, as per the provisions of the Act, has to give details about the depositors and the amount deposited by them in a prescribed form within three C months from the date on which the liquidation order is passed or from the day on which he takes charge, whichever is later and within two months from the date on which the details are submitted to the Corporation, the Corporation has to make payment to the above extent D either to the depositors directly or to them through the Official Liquidator. Thus, as per the Scheme, each depositor, including each original petitioner, must have received Rs.1 lakh from the Official Liquidator. Initially, upon the bank being ordered to be wound-up, the E depositors had a right to re~over Rs.1 lakh or the amount deposited, whichever was less, from the Official Liquidator and the said amount must had been paid to them when the petitions were filed. [Paras 20, 21) [134- F 0-H; 135-A] 1.2 After payment to the above extent is made to each depositor, if any amount is available at the disposal of the Official Liquidator, which he might have recovered from the borrowers or from other sources, he has to pay G the said amount to the extent to which the amount had been paid by the Corporation as per the provisions of Section 21 of the Act. When the Corporation had paid to the depositors as per the insurance scheme under the H Act, the Corporation gets a right under Section 21 to get 126 SUPREME COURT REPORTS (2015] 8 S.C.R. A money from the Official Liquidator. Thus, the Official Liquidator, as per clause 2(a) of Section 21, has to repay the amount to the Corporation. Section 21 not only makes it obligatory on the part of the Official Liquidator to repay the said amount to the Corporation, but it also clarifies B that there shall not be any other preferential creditor who would be getting any amount from the Official Liquidator till the amount payable under Section 21 is paid to the Corporation. Regulation 22 of the Deposit Insurance and Credit Guarantee Corporation General Regulations, 1961 C also provides that the Official Liquidator, after making necessary provision for the expenses in relation to the liquidation proceedings and for declaration of dividend, as prescribed in the Regulations, has to make payment 0 to
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