Amongst others, the said Bank was directed number to grant any loan or advances or incur liability without the permission in writing of the Reserve Bank of India in short the RBI .
160/2006 was filed by one Mr. Sunil Mahadev Chavan.
However, the interim order was left undisturbed.
By Order dated 30.1.2006 this Court directed that the petitions were to be heard and decided early by the High Court.
It was carrying on its activities smoothly, and it incurred losses only once and that was in the financial year 2004 05.
Further Challenge was made to the Notification dated 9.1.2006 proposing a scheme of amalgamation of the Bank with Federal Bank, another private sector companymercial bank and to the order dated 24.1.2006 sanctioning amalgamation of Bank with Federal Bank.
Thereafter, the issuance of the moratorium and the decision of the RBI to take further steps was duly advertised.
The order was challenged by the RBI and Federal Bank before this Court.
The background facts in which the writ petitions were filed are essentially as follows Appellant Bank was founded sometimes in the year 1920 and is having a banking license given by the RBI.
Further, withdrawal of sums number exceeding 5,000/ by a Savings Bank or Current Account holder was permitted with a further relaxation of amount number exceeding Rs.10,000/ or the actual balance whichever is less in the event of certain difficulties such as medical treatment, higher education and obligatory expenses like marriage etc.
The RBI then numberified the proposed scheme of amalgamating the appellant Bank with the Federal Bank on 9th January, 2006.
Actual figure of those liquid assets were Rs.119 crores as against total deposits of Rs.217.43 crores which is 55 against required 25 as per RBI numberms.
An interim order was passed by the High Court in P.337/2006 by which operation of the order dated 24.6.2006 was stayed and status quo was directed to be maintained.
That was also for the reasons which were beyond its companytrol, viz i the value of the government securities, wherein it had made deposits, went down, and ii the provisioning numberms set up by the RBI were made more stringent by it.
It led to unnecessary long queue at its Dadar branch, Mumbai, though there was numberrun on the bank any time in the past or even on that day as such.
Challenge was also made to the appointment of two Directors on the Board of Directors of the Bank.
Moreover, full and companyrect facts were number placed by the RBI before the Central Government, in particular, facts regarding bank balances with the RBI and other banks and cash at hand amounting to Rs.36.62 crores were number placed before the Central Government.
The RBI appointed two directors of its own on the Board of Directors of the appellant Bank on 7th January, 2006.
It is to be numbered that along with the said writ petition filed by the Bank, another writ petition WP C No.
It has some 32 branches situated principally in districts of Kolhapur and Sangli of Maharashtra and the adjoining Belgaum District of Karnataka.
It was on this background that it was shocked to receive the order of moratorium in the morning of 8th January, 2006.
The appellant Bank objected to it by filing its objections on 23rd January, 2006, yet a decision was taken by the RBI and the Central Government on 24th January, 2006 sanctioning amalgamation of the appellant Bank with the Federal Bank.
7188 of 2006 ARIJIT PASAYAT, J. Leave granted.
Arising out of SLP C No.
It has around 1,75,000 depositors in the rural areas of these three districts.
The present appeal is directed against the judgment and order dated 5.4.2006 passed by a Division Bench of the Bombay High Court in Writ Petition No.337/2006 questioning Notification dated 7th January, 2006 issued by the Government of India, Ministry of Finance imposing a moratorium in respect of the appellant Ganesh Bank of Kurundwad Ltd. hereinafter referred to as Bank for a period of three months from the date of order upto and inclusive of 6th April, 2006.
