RBI was justified in placing limits from withdrawal from account of PMC bank

Bombay High Court has ordered that, RBI was justified in placing limits from withdrawal from account of PMC bank.

As per Hon’able High Court, no interference is permissible with the impugned directions of the RBI as they are based on the prerequisites or the pre-satisfaction in terms of section 35A of the Act of 1949.

The Court further added that, The argument based on Section 61 of the Multi State Co-operative Societies Act, 2002 fails to impress us. It is, as often said, an enabling provision to facilitate Government aid to Cooperative Societies. We cannot, in the facts and circumstances of this case, particularly when serious charges of fraud are made, compel, by our writ, the Government to aid P&MC Bank to tide over the alleged financial crisis. Similarly, the Deposit Insurance and Credit Corporation Act, 1961 can have no application at this stage because neither there is a scheme of amalgamation or winding up of the P&MC. Finally, all the decisions cited before us have no application to the facts and circumstances of the P&MC. The guiding principles therein are applicable when a public law remedy is available and not otherwise.

With this observations, all the writ petitions were dismissed.

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Tags : Judgement, High Court, RBI, News