Money & Banking

RBI approaches Supreme Court, challenging Bombay High Court’s order on PMC Bank

Prashasti Awasthi Mumbai | Updated on February 04, 2020 Published on February 04, 2020

A file photo of the Punjab and Maharashtra Cooperative Bank branch in Mumbai   -  PAUL NORONHA

Banking regulator claims it was not heard in the case

The Reserve Bank of India has approached the Supreme Court, challenging the Bombay High Court’s order in the case pertaining to the directions for sale of the mortgaged property of Punjab and Maharashtra Cooperative Bank (PMC), reported Bar and Bench.

The RBI challenged the High Court order saying the public interest litigation (PIL) in which the order was passed did not make the RBI a party in the matter, said the report. Thus, it was passed without hearing the RBI, it added.

The RBI further said it had taken various measures in an attempt to revive the co-operative bank, including the appointment of an administrator last September. Hence, the RBI approached the apex court seeking a stay on the HC’s order, the Bar and Bench report added.

Senior Advocate Rakesh Dwivedi pushed the case for an urgent hearing today before the Bench of Chief Justice of India SA Bobde and Justices BR Gavai and Surya Kant.

Enforcement Directorate’s move

The RBI’s plea came a month after the Enforcement Directorate (ED) plea to the Supreme Court, challenging the Bombay High Court order concerning PMC Bank. The High Court’s order directed two accused persons -- Rakesh and Sarang Wadhawan (the promoters of HDIL) -- to be released from Arthur Jail and kept under house arrest to enable the disposal of their assets.

The Bombay High Court had appointed a three-member committee to direct the speedy auction and sale of assets of Housing Development and Infrastructure Ltd (HDIL), and distribute the proceeds to the depositors of PMC Bank, the report further said.

The Bombay HC stated that it had to pass the order releasing the accused to ensure cooperation with the Committee. The Court directed that the Wadhawans be shifted from Arthur Road jail to their Bandra residence, where they were to be kept in the custody of two guards each until further orders. The guards had been directed to make sure that the accused did not venture outside the jurisdiction of the High Court.

The SC later stayed the directions of the Bombay HC to move the Wadhawans, as per the Bar and Bench report.

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Published on February 04, 2020
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