The Bombay High Court on Thursday suspended the operation of the Reserve Bank of India (RBI) order cancelling the banking license of Rupee Co-op Bank Ltd, which was to return into impact from September 20.
The HC mentioned that “pending appeal before the appellate authority, operation of the August 8, 2022 order shall remain suspended and the appellate authority shall dispose of the appeal positively on October 17 in accordance with law.”
A single-judge bench of Justice Sandeep Ok Shinde on Thursday handed an order in a plea by the Bank and Rupee Sangharsh Samiti, an affiliation of depositors. The petitioners mentioned the impugned order was challenged earlier than the Appellate Authority, Department of Financial Service (Banking Division) Ministry of Finance.
The Appellate Authority, by way of its September 19 order, had discovered no purpose to intrude with the impugned RBI order and thus, the prayer for interim reduction was declined. The mentioned order was then challenged by the Bank and Rupee Sanghash Samiti.
Senior advocate Venkatesh Dhond, for the RBI, mentioned that the single-judge bench doesn’t have energy to determine plea in opposition to the impugned order as per HC Rules and similar might lie earlier than a division bench comprising two judges.
Dhond additional mentioned that the Samiti has independently challenged the August 8 order earlier than a division bench, after which Justice Shinde mentioned he was not inclined to entertain the petition by the Samiti.
Dhond justified the RBI order and mentioned that there was 85.93 per cent deposit erosion as on March 31 and gross non-performing property (NPAs) of the Bank had been at Rs. 285.42 crore and there was no enchancment in monetary place even after 9 years from the imposition of operational directions. If the petitioner is allowed to hold on its enterprise any additional, it could adversely have an effect on the general public curiosity, the RBI argued
Advocate Pratap Patil for the Bank contended that the Appellate Authority has not recorded its impartial discovering whereas declining interim reduction and easily upheld the RBI order. Patil added that the proposal of the group of buyers to transform the cooperative financial institution right into a small finance financial institution (SFB) with infusion of capital has not been thought-about by the Reserve Bank whereas passing the impugned order.
He mentioned the statutory attraction is scheduled for listening to on October 17 and if the August 8 RBI order will not be stayed or suspended, the substantive proper of petitioners can be pissed off.
After listening to submissions, the single-judge bench mentioned that the Supreme Court judgement which mentioned that “it is not the function of court to sit over matters of economic policy and the same be left to expert bodies” utilized within the current case.
Newsletter | Click to get the day’s greatest explainers in your inbox
Justice Shinde noticed, “In any case, the RBI before cancelling the licence had examined revival and merger proposals. I am not inclined to interfere with the August 8 order on merits and that is left open for Appellate Authority to examine in Appeal.”
The bench held, “In the interest of justice, if the operation of RBI’s order is not suspended, until the disposal of the statutory appeal, the appeal itself would be rendered infructuous at this stage. I deem it appropriate to suspend the August 8 order passed by the RBI till the conclusion of Bank’s appeal pending before the Appellate Authority.”