Reserve Bank of India
Legislation UpdatesNotifications

Punjab and Maharashtra Cooperative Bank Limited, Mumbai, Maharashtra, a Multi-State Urban Cooperative Bank was placed under All-Inclusive Directions under sub-section (1) of Section 35 A read with Section 56 of the Banking Regulation Act, 1949 with effect from close of business on September 23, 2019 vide Directive DCBS.CO.BSD-1/D-1/12.22.183/19-20 dated September 23, 2019, in the interest of depositor protection. The Directions were modified from time to time, the last being on November 5, 2019 as a result of which 78 per cent of the depositors of the bank were in a position to withdraw their entire account balance.

Reserve Bank has been closely monitoring the situation and has been holding regular meetings with the Administrator and the Advisory Committee of the bank. The Reserve Bank has also been, directly and through the Administrator, discussing with various authorities on expeditious sale of securities and recoveries of loans. Due to various factors including legal processes, tangible outcomes are taking some time.

It must be noted that unlike in the case of commercial banks, the Reserve Bank has no powers to draw up an enforceable scheme of reconstruction of a cooperative bank. Nevertheless, in the interest of the depositors and the stability of the cooperative banking sector, the Reserve Bank of India, in consultation with various stakeholders and authorities, is trying to work out a scheme for revival of the bank. In order to take this forward, it is considered necessary to extend the aforesaid Directions for a further period of three months.

Accordingly, it is hereby notified for the information of the public that the validity of the aforesaid Directive dated September 23, 2019, as modified from time to time, has been extended for a further period of three months from March 23, 2020 to June 22, 2020, subject to review. All other terms and conditions of the Directives under reference shall remain unchanged.

Reserve Bank of India

[Press Release dt. 21-03-2020]

Kerala High Court
Case BriefsHigh Courts

Kerala High Court: Alexander Thomas, J., considered a time extension sought by the petitioner for payment of the due amount and directed the petitioner to immediately disburse the loan amount to the respondent bank. 

The petitioner approached the Bench for reclaiming the possession of the property from the respondent Bank upon clearing the loan amount along with further interest amount. The loan was provided to the petitioner under the One Time Settlement scheme however the petitioner failed to disburse the amount on the stated date under the scheme hence the respondent has claimed for an amount of higher figure.

The advocates representing the petitioner, V.K. Peermohamed Khan and V. Renjith submitted that the petitioner is prepared to pay the due amount, mentioned in the possession notice, on or before 29-2-2020. They submitted the Court may direct the respondent Bank to close the loan account and the return the possession of the petitioner’s property along with the title deeds. The advocates also submitted that even though the time limit for disbursing the amount was exceeded by the petitioner, now that the petitioner is prepared to pay the erstwhile amount, the Court may kindly grant this benefit to the petitioner.

The standing counsel representing the respondent, A.S.P. Kurup submitted that since the petitioner had failed to pay the amount on the date provided under the one time settlement scheme, the petitioner is no longer subjected to the benefits under the scheme. 

The Court upon perusal of the facts and records directed the petitioner to immediately approach the concerned respondent officials and seek an extension of time limit for paying off the amounts due under the erstwhile scheme. The Court stated that since the time extension sought for by the petitioner is not very long the respondent bank may sympathetically consider the plea of the petitioner.  [P.H. Mohamed Ali v. Union Bank of India, 2020 SCC OnLine Ker 521, decided on 06-02-2020]

Case BriefsSupreme Court

Supreme Court: The vacation bench of Deepak Gupta and Surya Kant, JJ has refused to grant extension of time to respective medical colleges/deemed universities for carrying out counselling for P.G. courses and has said,

“If we permit violation of schedule and grant extension, we shall be opening a Pandora’s box and the whole purpose of fixing a time schedule and laying down a regime which strictly adheres to time schedule will be defeated.”

The petition filed by Education Promotion Society for India which representing a large number of   educational institutions including medical colleges running post­graduate (P.G.) medical courses that showed concern over the large number of seats in these colleges that are lying vacant. It was argued that there is an acute shortage of doctors in India and, in fact, the Union of India has permitted increase of seats in government medical colleges without increase of infrastructure

“this shows that the intention of the State is to ensure that more and more doctors pass out and treat the patients.”

The petitioner also cited various orders of this Court where extension of time was granted to medical colleges for carrying out counselling. On this the Court said,

“In this case the petitioners want a general extension of time not on account of any particular difficulty faced by any individual college or university but generally on the ground that a large number of seats for the P.G. courses are lying vacant.”

Taking judicial notice of the fact that every year large number of nonclinical seats remain vacant because many graduate doctors do not want to do post­graduation in non­clinical subjects, the Court said,

“Merely because the seats are lying vacant, in our view, is not a ground to grant extension of time and grant further opportunity to fill up vacant seats. The schedule must be followed.”

[Education Promotion Society for India v. Union of India, 2019 SCC OnLine SC 780, decided on 21.06.2019]