16Liability of Corporation in respect of insured deposits

(1) Where an order for the winding up or liquidation of an insured bank is made, the Corporation shall, subject to the other provisions of this Act, be liable to pay to every depositor of that bank in accordance with the provisions of section 17 an amount equal to the amount due to him in respect of his deposit in that bank at the time when such order is made:

Provided that the liability of the corporation in respect of an insured bank referred to in clause (a) or clause (b) ¹[of sub-section (1) of section 13] ²[or clause (a) or clause (b) of section 13C] shall be limited to the deposits as on the date of the cancellation of the registration:

Provided further that the total amount payable by the Corporation to any one depositer in respect of his deposit in that bank in the same capacity and in the same right shall not exceed one thousand and five hundred rupees:

Provided further that the Corporation may, from time to time, having regard to its financial position and to the interests of the banking system of the country as a whole, raise, with the previous approval of the Central Government, the aforesaid limit of one thousand and five hundred rupees.

(2) Where in respect of an insured bank a scheme of compromise or arrangement or of reconstruction or amalgamation has been sanctioned by any competent authority and the said scheme provides for each depositor being paid or credited with, on the date on which the scheme comes into force, an amount which is less than the original amount and also the specified amount, the Corporation shall be liable to pay every such depositor in accordance with, the provisions of section 18 an amount equivalent to the difference between the amount so paid or credited and the original amount, or the difference between the amount so paid or credited and the specified amount, whichever is less:

Provided that where any such scheme also provides that any payment made to a depositor before the coming into force of the scheme shall be reckoned towards the payment due to him under that scheme, then the scheme shall be deemed to have provided for that payment being made on the date of its coming into force.

(3) For the purposes of this section, the amount of a deposit shall be determined after deducting therefrom any ascertained sum of money which the insured banks may be legally entitled to claim by way of set off against the depositor in the same capacity and in the same right.

(4) In this section,--

(a) "original amount" in relation to a depositor means the total amount due by the insured bank immediately before the date of coming into force of the scheme of compromise or arrangement or, as the case may be, of reconstruction or amalgamation to the depositor in respect of his deposit in the bank in the same capacity and in the same right:

Provided that where under the proviso to sub-section (2), the scheme is deemed to have provided for any payment being made on the date of its coming into force the amount of such payment shall be included in calculating the original amount;

(b) "specified amount" means one thousand and five hundred rupees, or, as the case may be, the amount fixed by the Corporation under the third proviso to sub-section (1).