Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 23 Banking Regulation Act 1987-Sections 22 45(2) |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Writ Petition |
Court | Supreme Court of India |
Disposal Nature | Petition Dismissed |
Headnote | Banking Regulation Act, 1987-Sections 22, 23, 45(2) and (7)-Sikkim C Banking Limited (SBL) applied for a licence, but RBI did not respond-Rather, RBI found several shortcomings and deficiencies in SBL functioning, yet authorised SBL to open a Branch in Delhi-Depositors depositing amount in the Branch-Bank incurred net loss of Rs. 56.22 crores-Special audit revealing siphoning of funds-Amalgamation of the bank with another bank and under the scheme depositors to be paid interest lesser than the contractual rate-Depositors seeking re-payment of their amount at the contractual rate of interest by RBI-Writ Petition filed in Supreme Court-Held: RBI while performing statutory functions has to balance general public interest with the interest and need of banks and financial institutions as such at the stage of issuing license for opening a branch-Decision of RBI to grant license to E open a branch was not correct when license under section 22 was not granted-But it would not be sufficient to foist liability on RBI to repay all depositors-Also RBI did not have day to day management and control on the bank and its relation with depositors of the bank was not such to hold it liable-Further compensation for violation of statutory duties is not applicable to loss caused in financial transactions undertaken by individuals with open eyes. |
Judge | Hon'ble Mr. Justice S.N. Variava |
Neutral Citation | 2004 INSC 137 |
Petitioner | Mr. Pramod Malhotra And Ors |
Respondent | Union Of India And Ors. |
SCR | [2004] 2 S.C.R. 688 |
Judgement Date | 2004-02-26 |
Case Number | 119 |
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