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      Question

      Section 43 of the Banking Regulation Act, 1949 provides

      a special evidentiary rule in winding-up proceedings. Under this section, every depositor of the banking company being wound up is deemed to have filed his claim for the amount shown in the banking companyтАЩs books as standing to his credit. What is the presumption that the High Court is required to make, and how may it be rebutted?
      A The Court presumes all deposits to be fraudulent unless the depositor proves otherwise Correct Answer Incorrect Answer
      B The Court presumes the books of account are inadmissible unless authenticated by the Reserve Bank Correct Answer Incorrect Answer
      C The Court requires each depositor to appear and verify their claim within thirty days Correct Answer Incorrect Answer
      D The Court presumes all entries to be false unless two directors attest to their accuracy Correct Answer Incorrect Answer
      E The High Court shall presume such claims to have been proved, unless the official liquidator shows that there is reason for doubting the correctness of the amount Correct Answer Incorrect Answer

      Solution

      Section 43, as substituted by the Banking Companies (Amendment) Act, 1953, provides that in any winding-up proceeding every depositor shall be deemed to have filed his claim for the amount shown in the banking companyтАЩs books as standing to his credit. Notwithstanding anything to the contrary in the Companies Act provisions relating to proof of debts, the High Court shall presume such claims to have been proved unless the official liquidator shows that there is reason for doubting the correctness of the amount. The burden of rebuttal lies on the official liquidator, not on the depositor. This pro-depositor provision eliminates the procedural burden on ordinary depositors of filing formal proofs of debt in every winding-up, recognising that the bankтАЩs own books constitute sufficient prima facie evidence of the liability.

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