Dismissed

Parvathy Jayraman v. R. B. I. and Ors.

Bombay HC10 Jan 2007WP/2750/2004

Case brief

AI extract

What is this about?

Depositors filed a writ petition seeking RBI investigation and suspension of the 2nd respondent bank's licence due to management issues. The Court noted an ongoing State inquiry under the MCS Act and directed the bank to submit periodic reports. The Administrator was allowed to continue.

What did the court decide?

Petition disposed of; Bank directed to file bi-monthly reports; Administrator permitted to continue.

Parvathy Jayraman Vs R. B. I. and Ors. — Banking and Recovery | Bombay HC (2007)

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 IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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 O. O. C. J.

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 WRIT PETITION NO.2750 OF 2004

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 Parvathy Jayaraman & anr. .. .. Petitioners
 v/s.

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 Reserve Bank of India & ors. .. Respondents
 Ms.Nandini Menon for petitioners.

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 Mr.K.G.Munshi i/by Udwadia Udeshi for respondent
 Nos.1 & 4.

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 Mr.N.N. Bhadrashete for respondent Nos.2 & 3.

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 Mr.D.Y.Chitnis for respondent No.5.

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 Mr.K.R.Belosey, Govt.Pleader for respondent No.7.

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 Ms.Rashida Savliwala i/by Dhruv Liladhar for
 respondent No.15.

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 -------

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CORAM : H.L. GOKHALE &
 V.M. KANADE, JJ.

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DATED : 10th January 2007

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P.C. :

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 1. Heard the learned Counsel for the parties.

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 2. This Petition is filed by the three
 depositors of respondent No.2-The South India
 Co-operative Bank Limited. The grievances are
 made that the affairs of the Bank are not run
 properly. There are so many outstanding amounts
 which are not being recovered. Prayer (a) of the
 Petition is to direct the 1st respondent-Reserve
 Bank of India to investigate into the affairs and
 working of the Co-operative Banks i.e. meaning

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 probably a number of Co-operative Banks in general
 and to make a report to the Court. Prayer (c) of
 the Petition is directed against respondent
 No.2-Bank as also prayer (d) which seeks
 investigation into the affairs of the 2nd
 respondent-Bank. The Petition was filed way back
 on 5th October 2004. A number of Affidavits have
 been filed by the respondents from time to time.

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 3. We are told that at one point of time a
 moratorium was imposed on this Bank and it still
 continues. It was also proposed to suspend the
 banking licence of the 2nd respondent-Bank, but in
 view of the representation of various parties the
 Reserve Bank of India has stayed its hands and has
 permitted the 2nd respondent-Bank to function.

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 4. What is material to note is that by its
 Affidavit dated 28th June 2006, Mr.Shashikant P.
 Ghorpade, District Deputy Registrar, Co-operative
 Societies, Mumbai, has stated in paragraph 2 as
 follows:-

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 " I say that the enquiry conducted under

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 Section 83 of the Maharashtra

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 Co-operative Societies Act, 1961 has been
 completed and a report has been submitted

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 by the Enquiry Officer Shri Vikas Rasal,
 District Deputy Registrar, Co-operative
 Societies (II), Mumbai to the Commissioner
 and Registrar, Co-operative Societies vide

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 letter dated 10.3.2006. I say that vide
 communication dated 16th May, 2006
 addressed to my predecessor in office, the
 findings of the enquiry have been
 communicated to my office. An Office
 Translation of the said communication
 dated 16th May, 2006 with the findings
 under Section 83 reproduced therein, is

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 hereto annexed and marked as EXHIBIT-1. I

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 say that the said report with the
 findings recorded therein has been
 forwarded by the Office of the

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 Commissioner and Registrar of Co-operative
 Societies, M.S. Pune to the Respondent

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 No.2, the South Indian Co-operative Bank

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 Ltd. for its reply in accordance with

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 the provisions of Section 84(4). I say

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 that as soon as the reply of the Bank is
 received, appropriate action under Section
 88 will be taken by the Commissioner and
 Registrar, Co-operative Societies."

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 It is stated in this paragraph that the enquiry

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 has been conducted by appropriate officers of the
 State under Section 83 of the Maharashtra
 Co-operative Societies Act (for short "MCS Act").
 Findings of that officer have been received and
 the Commissioner and the Registrar of the
 Co-operative Societies are looking into the
 entire aspect. It is further stated that the
 reply of the Bank is sought.

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 5. Mr.Bhadrashete appearing for respondent
 Nos.2 and 3 states that the reply will be filed
 within two weeks from today. On receiving the
 reply, the officers of the Co-operative Department
 concerned are expected to take appropriate action
 under Section 88 of the MCS Act.

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 6. Mr.Munshi appearing for respondent
 Nos.1-RBI and 4 states that the Reserve Bank of

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 India is fully seized of the matter. An Affidavit
 dated 7th November 2006 has been filed by one
 Mr.Rajagopaul V. Iyer, who is presently
 functioning as an Administrator of this Bank and
 has stated therein that by 28th October 2006, a
 sum of about Rs.46.60 Crores has been recovered.
 Mr.Bhadrashete states that further recoveries are
 in process.

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 7. The Bank was expected to file the

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 bi-monthly reports. We direct the Bank to file
 those bi-monthly reports with the Reserve Bank of
 India, with a copy to the Commissioner of the
 Co-operative Societies, Maharashtra State.

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 8. Ms.Menon appearing for the petitioners
 accepts that Mr.Iyer has been doing a good job as
 the Administrator. She fears that perhaps his
 term may be discontinued.

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 9. We asked Mr.Belose, Government Pleader, as
 to what is the position in that behalf. He has
 left it to the Court to give necessary directions.

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 10. In view of the request of Ms.Menon and in
 view of what is stated by Mr.Belose, there is no
 reason to disturb the position of Mr.Iyer who
 appears to be doing a good job. The Administrator
 has been appointed by the Commissioner of
 Co-operation on a requisition by the Reserve Bank
 of India under Section 110A of the MCS Act. Under
 sub-section (iii) of Section 110A of the MCS Act,
 the term is supposed not to exceed five years. As
 of now, only six months have gone. This being the
 position, in our view, Mr.Iyer can continue for
 the remainder term unless there are any serious

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 complaints received by the Commissioner for

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 Co-operation. The Commissioner, however, will not
 take any action to discontinue him except after

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 consulting the appropriate officers of the RBI.

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 11. We expect the Authorities of the State
 Government to take their decision after receiving
 a reply of the 2nd respondent expeditiously and
 preferably within three months from the receipt
 thereof.

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 12. In view of the above, the Petition stands
 disposed of.

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(H.L. GOKHALE, J.)

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(V.M. KANADE, J.)

Parvathy Jayraman v. R. B. I. and Ors.

Case brief

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What did the court decide?

Parvathy Jayraman v. R. B. I. and Ors.

Case brief

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What did the court decide?

What the court decided

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