An Act no. 56 of the year 1962 being short titled as ‘The State Associated Banks (Miscellaneous Provisions) Act, 1962’ was enacted with the view to provide for further amendment of the earlier three enactments including, The State Bank of India Act, 1955 (Act no. 23 of 1955), The State Bank of India (Subsidiary Banks) Act, 1959 (Act no. 38 of 1959) and The Bankers’ books Evidence Act, 1891 (Act no. 18 of 1891). Also the provisions have also been made to wind up certain State-associated banks being minor. The Act was assented on 14th December, 1962 and finally brought into force on 1st January, 1963.
The Act took all three Acts one by one for concerned amendments. Firstly, An Act of 1955 i.e. the State Bank of India Act, 1955 was amended. The said Act of 1955 originally, provides for establishment State Bank and to taking over of Imperial Bank. While so, the provisions of that Act provides for vesting of management i.e. general Superintendence and directions of the affairs of the State Bank with the Central Board i.e. the Board of Directors of the State Bank. And section 31 of the said Act provides for meetings of such Central Board, which should be at the prescribed place, time and should also follow prescribed procedure while transacting the business of the meeting. The section further provides that every question which arose in the meeting should be decided with a majority of votes of the Directors who attended the meeting. If any Director having any kind of interest in any contract, loan, etc. which entered into or otherwise proposed thereof by the State Bank then such Director should disclose his nature of interest to the Board and should be absent in concerned meeting and if upon a wish of other Director he attend the meeting then he should not cast his vote in decision. Now, the Amending Act sought insertion of proviso clause to this provision stating that if he is being share- holder holding 2 per cents of the paid-up capital and not more than that or even a corporation, co- operative society with whom the State Bank has entered a contract, loan, etc. or even if such persons is being Director but ex officio of the State Bank or other Director of subsidiary bank, then in all such situation the persons provided hereinbefore are to be exempted from applicability of aforesaid restriction of non-attending meetings or if so attended then should not cast votes as aforesaid. The Act of 1955 was amended several times including its recent amendment in the year 2010 by the Act no. 27 of 2010 dated 15th September, 2010.
Secondly, this Amending Act sought to amend the provisions of the State Bank of India (Subsidiary Banks) Act, 1959. More specifically, the Amending Act sought to substitute a new title in the Chapter II of the Act of 1959, in place of older one. The new title contains provisions as to constitution of new Banks and also for changing names of any subsidiary bank. So far as such constitution of new Bank is concerned the provision of section 3 of that Act empowers the Central Government to constitute new banks namely the State Bank of Bikaner, State Bank of Indore, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore. Again the Amending Act sought to insert new provisions dealing changing of name of a subsidiary bank by the Central Government after having consultation with the Apex Bank i.e. Reserve Bank and also with the State Bank. Such change should be without having any effect to its rights, obligation, etc. Also certain other relevant amendments were made by this Amending Act in the provisions of section 12, 13, etc. of the Act of 1959.
Thirdly, the Amending Act sought to make certain important amendments in the Bankers’ books Evidence Act, 1891, more specifically the section 2 which is providing certain important definitions of the terms used under that Act. Clause (1) of the Section 2 was sought to substitute with the new clause dealing with the definition of the terms ‘Company’ which here means a company within the meaning of section 3 of the Companies Act, 1956 and also the foreign company sought to be inserted within its meaning which was defined under section 591 of Act of 1956. Moreover, a new clause (1A) was inserted dealing with definition of the term ‘corporations’. A body corporate established under any law is corporation which also includes the Reserve Bank of India, State Bank of India and also any subsidiary bank within the meaning provided under the State Bank of India (Subsidiary Banks) Act, 1959. Moreover, in a definition of the term Bank a company or corporation carrying business of banking is inserted.
Moreover, the Amending Act more specifically, under its section 5 makes winding up provisions in relation to the Dholpur State Bank. The Central Government is empowered to appoint officers for taking over the management of the Director Bank or to wind up its affairs. Every claim in relation to such proceedings were required to be entertained by the Principal Civil Court of Original jurisdiction in the District where the head office of the Dholpur Bank situated.
And lastly, the provisions of section 6 of the Amending Act sought to amend the provisions of the State Bank of Kurundwad (Junior) Act, 1933. Under section 22 whereof, the mention of ‘The Indian Companies Act’ was taken of and ‘The Companies Act, 1956’ was substituted. And after this Section 22 a new provisions of section 22A was inserted which is dealing with provision being special for winding up of the Bank stating that all the provision which are applicable for winding up of companies or corporations should not have applicability in case of winding up procedure of the Bank. In case of such winding up of the Bank, the provisions of section 5 of the State Associated Banks (Miscellaneous Provisions) Act, 1962, are applicable however, the provisions contained under Section 5(1) clauses (d), (e) thereof should not have applicability, and provisions of Section 45-O of the Banking Companies Act, 1949 also having applicability.
by Faim Khalilkhan Pathan.