Dismissed

Sudhakar Vishnu Powar and Ors. v. Union of India, through Secretary, Finance, Ministry of Finance, Dept of Financial and Ors.

Bombay HC15 Jul 2014WP/6105/2014

Case brief

AI extract

What is this about?

Depositors sought interim relief to stay the appointment of a Board of Liquidators pending a statutory appeal against the RBI's cancellation of the bank's license. The Court found the appeal was the proper forum and declined to exercise writ jurisdiction.

What did the court decide?

Prayer for interim relief staying the appointment of the Board of Liquidators was dismissed; petition dismissed.

Sudhakar Vishnu Powar and Ors. Vs Union of India… — Banking and Recovery | Bombay HC (2014)

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905.WPNo.61052014

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE SIDE

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WRIT PETITION NO. 6105 OF 2014

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Sudhakar Vishnu Powar & Ors. ... Petitioners vs. Union of India & Ors. ... Respondents

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Mr.S.S.Patwardhan, Advocate for the Petitioners. Mr.S.S.Pakale a/w. Mr.P.S.Gupta, Advocate for the Respondent No. 1/UOI.

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Mr.Venkatesh Dhond Senior Counsel a/w. Parag Sharma i/by Udwadia Udeshi & Co, Advocate for the Respondent Bank. Ms.J.B.Kurup, 'B' Panel, A.G.P. for the Respondent/State.

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CORAM :NARESH H.PATIL & RAVINDRA V.GHUGE, JJ. DATED :15TH JULY, 2014

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P.C.

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The petitioners claim to be member/depositors of respondent No. 4-Shivaji Sahakari Bank Ltd. By an order dated 12/06/2014, the

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Reserve Bank of India (in short 'RBI') cancelled the license of the respondent Bank to carry on banking business. By an order dated 18/06/2014, the Commissioner of Cooperation and Registrar of Cooperative Societies, Maharashtra State, Pune passed an order, in exercise of powers conferred under section 110A(1)(iii) of the Maharashtra Cooperative Societies Act, 1960 (in short M.C.S.A.) thereby appointing a Board of Liquidators for winding up of the affairs

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of the respondent- Bank. Against the order passed by the R.B.I., the petitioners claim to have filed an appeal in the Office of Joint Secretary (Finance) Ministry of Finance, Department of Financial Banking Division, Government of India, New Delhi under section 22(5) of the Banking Regulation Act, 1949.

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The learned counsel appearing on behalf of the petitioners submits that a prayer for interim relief in the nature of a direction that the liquidator shall not take charge of the respondent-Bank, is pressed before the Appellate Authority. The appeal is still not heard. It is further contended that if the liquidator takes charge, the depositors would suffer. It is further submitted that if the management of the Bank is entrusted to the elected body, the financial condition of the bank could improve and it could be revived. It was further submitted that in an identical situation, this Court had allowed a petition staying the order of appointment of the liquidator.

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On behalf of the State Government, an affidavit-in-reply is filed by Mr.A.H.Bhandare, Assistant Registrar, Co-operative Societies, Gadhinglaj, Kolhapur. The deponent submits that on 21/06/2014, he had

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approached the bank to take charge of record and books of accounts as well as assets of bank, but as the General Manager and the Chairman of the Administrative Board were on leave, he could not take charge.

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The learned counsel appearing for R.B.I. submits that near about 19,000 depositors had deposited less than Rs.1,00,000/- with the bank which was insured and secured under the D.I.C.G.C. Scheme. Near about 25 depositors had deposited amounts more than Rs.1,00,000/-. The counsel further submits that considering the reports, the balance sheet and the financial indication for a period from the year 2006 to 2013 and the inspection reports, the R.B.I. had taken decision in the interest of the depositors. The counsel submits that on merits the petitioners do not deserve interim relief at the hands of this Court. Statutory appeal has been preferred by the petitioners, wherein the petitioners are entitled to pray for appropriate relief.

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We have perused the record placed before us and the impugned order passed by the State Government. Surprisingly, in spite of the fact that the State has appointed the Board of Liquidators on 18/06/2014, the Board is unable to take charge of the affairs of the bank. In the affidavit-

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in-reply, the deponent - Assistant Registrar Mr.Bhandare has averred that as the General Manager was on the medical leave, he could not take charge.

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We are not convinced with the reason put forth by the Assistant Registrar. On the merits of the case, we find that the petitioners who claim to be members/depositors are raising an issue on behalf of the depositors of the bank. It is an admitted fact that by an order dated 27/12/2010, the Board of Directors of the respondent bank was superseded and an Administrative Board under section 110 of M.C.S.A. was appointed. For near about four years, the Administrative Board had functioned and ultimately the R.B.I. had to cancel the banking license of the respondent-Bank.

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As the petitioners' appeal is pending before the Appellate Authority, we find that the petitioners have to pray for interim relief in the said appeal. Considering the facts and circumstances, we are not inclined to exercise our extra-ordinary writ jurisdiction. The petition is dismissed.

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(RAVINDRA V.GHUGE,J.)

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(NARESH .H.PATIL, J.)

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Gaikwad RD

Sudhakar Vishnu Powar and Ors. v. Union of India, through Secretary, Finance, Ministry of Finance, Dept of Financial and Ors.

Case brief

What is this about?

What did the court decide?

Sudhakar Vishnu Powar and Ors. v. Union of India, through Secretary, Finance, Ministry of Finance, Dept of Financial and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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