Tag: HC

HC rejects bail pleas of Rana Kapoor’s wife, daughters, BFSI News, ET BFSI

Banking & Finance

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The Bombay High Court Tuesday rejected bail pleas filed by jailed banker Rana Kapoor’s wife Bindu Kapoor and their daughters Roshini and Radha Kapoor Khanna in a case of alleged fraud caused to Yes Bank Ltd (YBL).

Kapoor is the cofounder of YBL who was arrested in the said matter in March, 2020.

Justice Bharati Dangre, after hearing all the parties had posted the matter today for the pronouncement of the order. The court gave an oral in the said matter.

The Kapoors, in three identical but separate bail pleas, challenged a special Central Bureau of Investigation (CBI) court order that rejected their bail applications and remanded them to judicial custody.

The trio since then have been lodged at Byculla district jail in Mumbai.

As per the CBI, Rana Kapoor and his family members had allegedly received kickbacks of around Rs 600 crore for an investment of Rs 3,700 crore made by Yes Bank in DHFL’s debentures.

Counsels appearing for Bindu Kapoor and her two daughters argued that they have so far extended fullest cooperation to CBI and was not arrested during the investigation.

“On August 20, 2021, the trial court took cognizance of various non-bailable offences and summoned applicants to appear before it as an accused. The applicants immediately submitted to its jurisdiction by appearing personally on September 4, 2021, and moved a bail application in terms of Section 439 of CrPC,” argued counsel for the Bindu Kapoor.

However, special counsel Hiten Venegaonkar, appearing for the investigation agencies countered this argument and said that the CBI court had already considered all these submissions before rejecting the plea.

Senior Advocate Amit Desai appeared for Roshini Kapoor in the case, while Mahesh Jethmalani, senior advocate argued for Bindu Kapoor and Radha Kapoor Khanna in the case.

“The interest of the investigation agencies stand protected as the Enforcement Directorate (ED) has attached properties and bank accounts of the applicant to the tune of Rs 600 crore under various provisional attachment orders,” argued the petition filed by Radha Kapoor Khanna.

“Special Judge failed to consider that the applicant has been granted bail in the PMLA case arising out of the current FIR in the same facts and circumstances,” Khanna’s petition said.

The special court, while rejecting their bail petitions, had observed that the trio are involved in the wrongful loss of public money to the tune of Rs 4,000 crore, which belongs to the public at large, including bank depositors and shareholders.



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HC to liquidator, BFSI News, ET BFSI

Banking & Finance

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Panaji: The high court of Bombay at Goa has directed the liquidator of Madgaum Urban Co-operative Bank S V Naik to take necessary steps expeditiously to provide relief to depositors from Curtorim, Macazanna, St Jose de Areal, Raia and others.

“The liquidator will have to pursue the matter with Deposit Insurance and Credit Guarantee Corporation (DICGC), so that at least depositors maintaining balance of less than Rs 5 lakh receive the amount up to Rs 5 lakh, in terms of the insurance scheme. Even the depositors maintaining a deposit of above Rs 5 lakh will be entitled to receive the amounts up to Rs 5 lakh under the scheme,” the court held.

“The liquidator should process all such claims as expeditiously as possible so that there is no undue delay in the matter,” stated the division bench comprising Chief Justice of the Bombay high court Dipankar Datta and Justice Mahesh Sonak.

The residents from Curtorim and neighbouring villages in Salcete, in a letter to the high court in September last year, stated that almost 8,000 account holders mostly agriculturists, fishermen, tenants and labourers had deposited their hard-earned earnings in the bank, which had now gone into liquidation.

They stated that they were not being permitted to withdraw any amount over Rs 5,000 from their bank accounts in terms of directives dated May 3, 2019 issued by the RBI and highlighted the immense difficulties faced by them, particularly during Covid-19 pandemic on account of being unable to access their bank accounts.

During the pendency of the petition, the limit for withdrawal was enhanced from Rs 5,000 to Rs 30,000 and on January 19, the high court directing RBI to consider whether the limit could be further enhanced to Rs 50,000 since Adv C A Coutinho, the counsel for the bank, submitted that the grievances of no less than 49,500 depositors from out of a total of 58,000 depositors would be redressed with the enhancement of such limit.

Assistant general manager of RBI, Sandra Rodrigues submitted to the high court on August 17 that in the present situation, where an order of liquidation or winding up of an insured bank has been made, every depositor in respect of his deposit in the bank shall be entitled to receive up to Rs.5 lakh from in accordance with the provisions of the Deposit Insurance and Credit Guarantee Corporation Act, 1961.

The court was told that almost 55,999 depositors had deposits of less than Rs 5 lakh with the bank and such depositors would therefore be entitled to receive amounts up to Rs 5 lakh from DICGC. This would leave about 636 depositors having a deposit of over Rs 5 lakh.



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RBI to HC, BFSI News, ET BFSI

Banking & Finance

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In a revelation, the Reserve Bank of India (RBI) has clarified that banks all over the country are witnessing increasing incidents of fraud due to their failure to adhere to its directives issued from time to time. In an affidavit submitted to the Nagpur bench of Bombay high court, the apex bank further disclosed that it doesn’t have the power to conduct investigations in banking frauds, nor does it have the machinery to do it.

The affidavit was filed while hearing a suo moto PIL for Rs25 crore losses caused to UCO Bank. Rajnish Vyas has been appointed as amicus curiae in the PIL. The embezzlement had taken place due to alleged forgery committed by a bank officer at its Wardha and Hinganghat branches. A division bench comprising justices Vinay Deshpande and Amit Borkar adjourned the hearing by six weeks.

Filed by RBI’s counsel SN Kumar, the affidavit added that as a regulator of the banking system in the country, it issued ‘Master Circular of Frauds’ to sensitize banks against scams and to have deterrent systems. “In spite of guidelines issued from time to time, it was observed that the frauds perpetrated in banks showed an increasing trend, mainly on account of non-adherence or improper implementation of circular directives issued by us. To enable the banks to have all current instructions in one place, a master circular incorporating all guidelines, instructions and directives on the subject was issued on August 1, 2001,” the affidavit mentioned.

Moreover, to enable the Government of India to have the required information on frauds, a suitable reporting system was introduced. Though the circular of March 22, 2002, has prescribed the period of reporting of frauds, it was realized that the banks aren’t following it scrupulously, the apex bank said.

At the RBI governor’s instance, the Central Vigilance Commission (CVC) has set up a high-level group to study incidents of fraud and suggest measures to prevent them. “This group observed that banks are not adhering to the time frame stipulated by RBI for reporting fraud cases. It has suggested that suitable penal action should be taken against defaulting banks. The banks are supposed to report frauds within a week of their detection and then a detailed report needs to be submitted in the prescribed format in the next three weeks,” the affidavit said.

The top bank added that to minimize incidents of fraud in the banking system, it has been making continuous efforts and regularly issuing circulars directing the banks to initiate appropriate action to contain them. “The Banking Regulation Act doesn’t empower RBI to conduct any investigations. The action may be initiated only after the offence is established by the law enforcement agencies. It’s mandatory for the banks to lodge a complaint of frauds with the police,” Kumar said.



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