Section 45E of the Banking Regulation Act, 1949 - Special Provisions to Make Calls on Contributories
Section 45E is part of the special winding-up framework for banking companies. It enables the High Court, after a winding-up order, to direct a contributory to pay a call even before the full list of contributories has been formally settled, provided the conditions stated in the section are satisfied.
Text of Section 45E
45E. Special provisions to make calls on contributories. - Notwithstanding that the list of the contributories has not been settled under section 467 of the Companies Act, 1956 (1 of 1956), the High Court may, if it appears to it necessary or expedient so to do, at any time after making a winding up order, make a call on and order payment thereof by any contributory under sub-section (1) of section 470 of the Companies Act, 1956, if such contributory has been placed on the list of contributories by the official liquidator and has not appeared to dispute his liability.
The wording above follows the current official consolidated text of the Banking Regulation Act, 1949. The section continues to reproduce cross-references to sections 467 and 470 of the Companies Act, 1956 in the official text.
Meaning and effect of Section 45E
The provision is designed to help the winding-up process of a banking company proceed without waiting for the final settlement of the complete list of contributories. Its operation is conditional, not automatic.
- A winding-up order must already have been made.
- The official liquidator must have placed the person concerned on the list of contributories.
- The person must not have appeared to dispute liability.
- The High Court must consider it necessary or expedient to make the call.
- The Court may then make a call and order payment even though the contributories list has not yet been formally settled.
Key expressions explained
- Contributory
- In winding-up law, a contributory is a person who is liable to contribute to the assets of a company in the event of its winding up, subject to the governing company law and the facts of the case.
- Call
- A call is a demand for payment of an amount legally due from a contributory toward the liabilities or assets required in the winding-up process.
- Official liquidator
- The official liquidator is the officer responsible for carrying out functions connected with liquidation under the applicable legal framework and orders of the Court.
- Winding-up order
- A winding-up order is a judicial order directing that the company be wound up. Section 45E becomes relevant only after such an order has been made.
Why Section 45E is a special provision
The opening words, "Notwithstanding that the list of the contributories has not been settled", allow the High Court to act before completion of that procedural step. The object is to avoid unnecessary delay where the official liquidator has already placed a person on the list and that person has not appeared to contest liability.
Important: Section 45E should be read with the other provisions in Part IIIA of the Banking Regulation Act, 1949 dealing with winding up and related proceedings. The exact liability of any person depends on the statutory framework, court orders, the liquidation record and the facts of the particular case.
Historical amendment notes
1. The reference to section 467 of the Companies Act, 1956 was substituted by Act 95 of 1956, section 14 and the Schedule, for the earlier reference to section 184 of the Indian Companies Act, 1913, with effect from 14 January 1957.
2. The reference to section 470 of the Companies Act, 1956 was substituted by the same amending provision for the earlier reference to section 187 of the Indian Companies Act, 1913, with effect from 14 January 1957.
Related provisions
For the surrounding statutory scheme, see Section 45D - Settlement of list of debtors and Section 45F - Documents of banking company to be evidence.
Official legal sources
For authoritative verification, refer to the official consolidated text of the Banking Regulation Act, 1949 on India Code and the Department of Financial Services, Ministry of Finance.