Section 45: Restriction on stay order

2[45. Restriction on stay order.__ (1) The High Court may, on the application of a banking company which is temporarily unable to meet its obligations, make an order staying for a fixed period on such terms and conditions as it may think fit the commencement or continuance of all proceedings against the company and may from time to time extend the period, so that the total period shall not exceed six months: Provided that no order of stay shall be granted by the High Court upon such application of a banking company unless it is accompanied by a report of the State Bank showing that in the opinion of the State Bank the banking company will be able to pay its debts if the application is granted. (2) The registrar of the concerned High Court shall forward a copy of every stay order to the State Bank of Pakistan, made under sub-section (1) of this Section. (3) When an application is made under sub-section (1), the High Court may appoint such a special officer of the banking company as recommended by the State Bank, who shall forthwith take into his custody or under his control all the assets, books, documents, effects and actionable claims to which the banking company is or appears to be entitled and shall also exercise such other powers as the High Court may deem fit to confer on him, having regard to the interests of the depositors of the banking company: Provided that a special officer appointed under this sub-section shall carry out his functions under the direction and supervision of the State Bank, which direction and supervision shall be in accordance with the powers conferred on him by the High Court. (4) Where the State Bank is satisfied that the affairs of a banking company in respect of which an order under sub-section (1) has been made, are being conducted in a manner detrimental to the stability of the financial system in Pakistan or the interests of the depositors, it may take a decision under section 42D and exercise any one or more of the Resolution powers provided under section 42E or make an application to the High Court for the winding up of the company, and where any such application is made, the High Court shall not make any order extending the period for which the commencement or continuance of all actions and proceedings against the company were stayed under that sub-section. (5) The special officer appointed by the High Court under sub-section (3) of this section shall continue to hold office until he is removed from office, or until the bank resumes business, or until a liquidator is duly appointed to wind up the business of the bank.]

Effective date: 1962-06-07

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