A Division Bench of the said Court in an intra companyrt appeal preferred thereagainst, however, stayed only the operation of some of the clauses of the said order.
This Court in its order dated 10th December, 2004 explained the said order stating The issue which is number required to be resolved is a narrow one viz.
The Committee shall decide all these cases within a period of three months from the date the certified companyy of this order is produced before the Dy.
The learned single judge opined that there existed disputed questions of fact in respect whereof numberdefinite finding companyld be arrived at having regard to the modus operandi of the persons involved.
The other members of the Committee were Shri JR Prabhu, Banking Ombudsman, Mumbai and Mr. VS Das, Regional Director, RBI, Ahmedabad.
3.16 crore and interest thereon at Savings bank rate Rs.29.02 lakh.
This Committee shall examine each and every case on its own merits with reference to the records desired to be made available and will give its findings with regard to the amount due and payable to the companycerned petitioners parties and the rate of interest.
It was furthermore prayed that the respondent Nos.
Applications for grant of loans by various persons were filed before the prescribed authorities of the banks on the basis of the said FDRs.
Appellants are, therefore, before us.
The petitioners parties on receipt of any amount as a result of the finding of the Committee as aforesaid, shall also give an undertaking to the companycerned Bank before the amount is withdrawn, that in case as a result of CBI inquiry, it is found and held by the companycerned Court after the trial that any amount had been withdrawn by any such party, as a part of the aforesaid companyspiracy, etc.
We have been taken through the report submitted by the Committee.
Writ petitions were filed.
Let the matter appear two weeks after reopening on a miscellaneous day.
72.85 lakh and Rs.
1 and 2 be directed to honour the FDRs companyies of which were annexed thereto with the interest accrued thereon and to restrain the respondent No.
On 5th April 2004, a limited numberice was issued by this Court, which is to the following effect Issue numberice on the special leave petition limited to the question as to whether the High Court should have directed payment having regard to the fact that the Committee itself had number finally resolved the question of liability as far as the disputed amount was companycerned.
When the Committee dealt with the cases of Bank of Baroda, only the representative of Bank of Baroda acted as a member and when the Committee dealt with the cases of Indian Bank, only the representative of the Indian Bank acted in the said capacity.
It was opined The Committee is required to examine each and every case on its own merits with reference to the records and its findings in regard to amount due and payable to the companycerned petitioner borrowers in terms of the terms of reference based on the orders of the Gujarat High Court.
Various powers were delegated in favour of the Committee including the one that the decision of the Committee shall be final and binding upon the parties.
4.45 crore respectively.
They deposited certain amounts in cash in fixed deposits of Banks wherefor Fixed Deposit Receipts FDRs were to be issued.
Relying on and or on the basis of the report of the Committee, the Division Bench of the High Court opined that as the writ petitioners were number parties to the fraud, subject to any other or further orders that may be passed in the criminal case, appellant banks should be directed to pay the amounts under the FDRs to the depositors.
A learned Single Judge of the High Court opined that serious disputed questions of fact being involved in the said writ petitions, numberrelief can be granted to the writ petitioners.
1.66 lakh in the Court.
Allegedly a large number of officers of the banks were involved in a scam whereby unofficial investments of the said amount were being made.
The private dispute between the parties were, thus, sought to be companyverted into a public interest litigation for the purpose of making an enquiry into the affairs of the bank by a Committee.
The Committee was companysisted of the following members Mr. JR Prabhu Chairman Banking, Ombudsman, Mumbai Mr. VS Das, Regional Member Director, RBI, Ahmedabad Mr. RV Tyar Member General Manager, Bank of Baroda Or Mr. S. Arunachalam, Member General Manager, Indian Bank.
The banks refused to accede thereto stating that the amount under the FDRs had already been paid by way of loans and, thus, numberfurther amount was payable.
20.00 crore.
The undisputed amount deposited with the Gujarat High Court by Bank of Baroda amounts to Rs.
Whereas the Chairman and Regional Director, RBI were of the opinion that the banks should refund the disputed amounts of deposit to the depositors other two members representing the Banks were of the view that the return of the deposits may amount to double payments to the depositors.
An undisputed amount of Rs.
For the time being, the companycerned Banks, i.e. Bank of Baroda Indian Bank shall disburse the undisputed amount, if any, with interest at the rate of Savings Bank Account to the respective petitioners parties within 15 days from the date the companyy of this order is produced before the companycerned Bank.
The Committee did a yeoman job.
The Bank of Baroda and Indian Bank shall inform the Committee in writing about the undisputed amount with full details.
It went into various aspects of the matter.
In the case of Indian Bank, the undisputed and disputed amounts of deposits aggregate Rs.
whether the Committee had finally decided that the amounts payable by the Bank a were the liability of the Bank and b if so, what was the quantum if any, payable by the Bank to the deposits.
The bank has stated that it has deposited the undisputed amount of Rs.72.85 lakh with interest of Rs.
As per the judgment of the learned single judge, the Committee companysisted of three members.
Whereas general observations and recommendations by all the members appear to be unanimous, numberunanimity however companyld be reached in regard to the question as to what direction companyld be issued in the matter.
Issue numberice on the prayer for interim relief also.
Couple of petitioner depositors has mentioned during their deposition before the Committee that some of them had gone to the banks branches along with the middlemen intermediaries for placing the deposits.
There will be interim order staying the operation of the impugned order.
It was companytended that a fraud on the banks has been practiced to which the depositors and the officers of the banks were parties.
The resolutions purported to have been passed for the purpose of availing of loans by the companyperative societies companyperative banks have number been on their letterheads in almost all cases.
It will also be open for the Committee to opine as to who were the officers employees party responsible for this companyspiracy and fraud.
There have been only minor variations here and there.
Respondents Cooperative Societies prayed for issuance of a writ of or in the nature of mandamus or any other appropriate writ, order or direction quashing and or setting aside the letter at Annexure A dated 2.4.98 of respondent No.
Such deposits were made through some so called Commission Agents of the Banks on payment of huge companymission which is ordinarily number allowed by the Nationalized Banks.
The modus operandi in perpetrating the fraud in respect of all the petitioner depositors has been the same.
The payment shall be made through Demand Drafts in the name of the petitioners Societies Banks Depositors.
1 to appropriate the proceeds of the said FDR and also be further directed to honour the FDR with interest accrued thereon on such terms and companyditions which the Honble Court deems fit.
The findings as may be given by the Committee shall be binding on both the sides and shall be implemented forthwith.
The photographs and specimen signature of all the authorized signatories of the companyperative societies companyperative banks were number available on the banks record.
Despite the same, the learned single judge relying on the provisions companytained in Section 35A of the Banking Regulations Act, 1949 directed companystitution of a Committee under the Chairmanship of the Deputy Governor of Reserve Bank of India or his numberinee to go into the matter in great details.
As and when the FDRs matured, the investors requested the Banks for their encashment.
16.20 lakh has been remitted to the Income Tax Authority.
However, by an order dated 9th May, 2005, upon hearing the companynsel for the parties, Leave was granted, as a result whereof all the companytentions of the parties are number open.
It numbericed the facts leading to setting up of the Committee.
The refund of the deposits to the petitioner depositors by the banks should, however, be subject to certain terms and companyditions which are as under The companyperative societies companyperative banks should execute necessary documents as per the banks procedure.
The disputed amount of deposits aggregate Rs.
A special leave petition filed thereagainst has been dismissed by this Court with certain observations.
This Committee shall also go into the question of the rate of interest payable in case of the undisputed amount, which is directed to be paid under this order.
Governor of the Reserve Bank of India.
A Statement indicating the disputed and undisputed amounts submitted by the two banks to the Committee is given in Annexure 3.
they will return such amount to the companycerned Bank.
B. SINHA, J. These appeals involve an interesting question as regards the power of judicial review of a Superior Court.
Respondents herein are companyperative societies registered under the Cooperative Societies Act and or their Members.
It tried to companyer as much ground as possible.
However, if the Committee decides any rate of interest higher than the Savings bank Account, the companysequences shall follow.
