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2019 DIGILAW 221 (GUJ)

KAUSHIKKUMAR OCHHAVLAL GANDHI v. BANK OF BARODA

2019-03-13

BELA M TRIVEDI

body2019
JUDGMENT BELA M. TRIVEDI, J. 1. All these petitions involve similar questions of facts and law, and therefore, they are being decided by this common judgment. 2. For the sake of convenience, the facts narrated in the Special Civil Application No. 12926 of 2000 are taken into consideration. The petitioners of Special Civil Application No. 12926 of 2000 are the family members, who had made investments with the respondent bank by way of Fixed Deposits in the year 1998, the details of which have been given in Annexure 'A'. When the petitioners demanded the said amounts back from the respondent Bank by giving notices through their Advocate on 30.03.1999, the said notices were replied by the respondent Bank vide the reply dated 23.04.1999. The petitioners, thereafter, repeatedly contacted the Branch Manager of the respondent Bank for getting their money back, however, the Branch Manager had refused to pay back the same. The petitioners, therefore, filed the petition seeking issuance of Writ of Mandamus directing the respondent to honour the Fixed Deposit Receipts at Annexure 'B' with interest accrued thereon. Similar petitions have been filed by the similarly situated other petitioners. 3. The petition has been resisted by the respondent Bank by filing its reply denying the allegations and averments made in the petition, and contending inter alia that the petition was not maintainable as it involved disputed questions of facts. As per the record of the respondent Bank, the Fixed Deposits Receipts were pledged as security for the advance obtained against the Fixed Deposits Receipts, and subsequently the said Fixed Deposit Receipts amounts were adjusted against the loan amount and the balance amount was held in the sundry deposit account with the branch. It was further stated inter alia that the duly discharged Fixed Deposits receipts were pledged as security for obtaining advances, and all the original documents including the Fixed Deposit Receipts and the letters of the respective petitioners duly signed by them were available with the Bank only. Since some fraud appeared to have been committed with the respondent Bank and/or with the petitioners, the investigation in the matter was already being carried out by the Central Bureau of Investigation, and therefore, the petition therefore was required to be dismissed being not maintainable. 4. Since some fraud appeared to have been committed with the respondent Bank and/or with the petitioners, the investigation in the matter was already being carried out by the Central Bureau of Investigation, and therefore, the petition therefore was required to be dismissed being not maintainable. 4. Having regard to the submissions made by the learned advocates for the parties and the documents on record, it appears that some other 38 cooperative societies / Banks had filed Special Civil Application No. 3196 of 1998 and others against the respondent - Bank of Baroda and Indian Bank, seeking similar prayers for refund of Fixed Deposits which the said petitioners had invested with the said banks. The said petitions were not entertained by the Single Bench vide the common judgment dated 02.05.2000, however while disposing of the said petitions, the Single Bench gave certain directions including the direction to the Reserve Bank of India to constitute a committee to look into the issues raised in the petitions. The respondent - Bank in the said petitions, had challenged the said order passed by the Single Bench by filing Letters Patent Appeal before the Division Bench. The Division Bench passed the interim order in the said Letters Patent Appeals upholding the constitution of the committee. Ultimately, the Division Bench vide the common order dated 01.10.2003 dismissed the said Letters Patent Appeals, however, directed to implement the report of the committee constituted by the Reserve Bank of India, submitted before the Court on 20.03.2001. It further appears that the respondent Bank therefore had filed appeals, being Civil Appeals No. 3303 of 2005 to 3338 of 2008 before the Supreme Court. The said appeals came to be allowed by the Supreme Court vide the judgment dated 16.05.2008 (reported in (2008) 12 SCC 541 ). In the said decision, the Supreme Court had elaborately considered all the issues including the powers of the High Court in issuing directions to constitute the committee and observed as under : - "39. The question as to whether fraud has been committed by the officers of the bank is pending consideration before a competent criminal court. There are other various disputed questions which are required to be gone into in the said proceedings. The role played by some of the respondent-writ petitioners is also in issue. The question as to whether fraud has been committed by the officers of the bank is pending consideration before a competent criminal court. There are other various disputed questions which are required to be gone into in the said proceedings. The role played by some of the respondent-writ petitioners is also in issue. Such seriously disputed questions of fact, in our opinion, could not have been gone into by the writ court. 40. We would accept the proposition of law as propounded by this Court in Guruvayoor Devaswom Managing Committee v. C. K. Rajan, (2003) 7 SCC 546 . In that case it was, inter alia, observed that public interest litigation procedures may be adopted in a case where initially the writ petition was filed as a private interest litigation. 41. We may in this behalf notice development of law in other jurisdiction. Abram Chayes in his article on "The Role of the Judge in Public Law Litigation", HARV. L. REV., Vol. 89 (1976) at p.1281 opines that "Traditionally, adjudication has been understood to be a process for resolving disputes among private parties which have not been privately settled". He thus emphasises the need for a "public law" model wherein "the traditional adversary relationship is suffused and intermixed with negotiating and mediating processes at every point. The Judge is the dominant figure in organising and guiding the case, and he draws for support not only on the parties and their counsel, but on a wide range of outsiders - masters, experts and oversight personnel". He goes on to give examples of school desegregation, employment discrimination, and prisoners' or inmates' rights cases as also antitrust, securities fraud and other aspects of the conduct of the corporate business, bankruptcy and re-organisations, union governance, consumer fraud, housing discrimination, electoral reapportionment, environmental management - fields that display in varying degrees the features of public law litigation. According to him, the public law litigation model, inter alia, has the following features : "7. The Judge is not passive, his function limited to analysis and statement of governing legal rules; he is active, with responsibility not only for credible fact evaluation but for organizing and shaping the litigation to ensure a just and viable outcome. 8. The subject-matter of the lawsuit is not a dispute between private individuals about private rights, but a grievance about the operation of public policy." 42. 8. The subject-matter of the lawsuit is not a dispute between private individuals about private rights, but a grievance about the operation of public policy." 42. In Krishna Swami v. Union of India, (1992) 4 SCC 605 , a Constitutional Bench of this Court had to decide upon the maintainability of a writ petition filed under Article 32 against the removal of a Supreme Court Judge without impleading the Judge himself as a party to the proceedings. The Court on the role of an Investigation Committee opined : "57. The investigation done by the Committee, thus is to find whether the alleged misbehaviour/incapacity has been proved. Undoubtedly, the public law litigation often contradicts the premise behind those of private law. In public law wider public interest is involved over and beyond the contending parties. It concerns the future and private law litigation is retrospective in operation." 43. What the court could do? It could appoint a committee. But the decision of the committee would not have been decisive. The Division Bench appears to have applied its mind on the report, but in the absence of any categorical finding that it was the officers of the banks alone who were liable, no direction as has been done in the instant case should have been issued. It may be that in appropriate cases, the court may find the recommendations made by the committee acceptable. 44. But it is, in our opinion, not a public interest litigation in that sense of the term. The report, however, was not unanimous. The opinion of the Committee was a divided one on the crucial issue. Two members of the Committee were of the opinion that whether the amount deposited by the cooperative banks was received by them or not, was yet to be ascertained. We are, therefore, of the opinion that it cannot be said that the fact-finding body, assuming that the same could be constituted, made such recommendations which could be accepted by the Court without going into the merits thereof. It is also not a case where any mandatory relief could be granted in favour of the respondents. 45. Having however said so, we must pose unto ourselves a further question. Could those cooperative societies which had absolutely no role to play in the entire episode should suffer in any manner whatsoever? It is also not a case where any mandatory relief could be granted in favour of the respondents. 45. Having however said so, we must pose unto ourselves a further question. Could those cooperative societies which had absolutely no role to play in the entire episode should suffer in any manner whatsoever? The cooperative societies / cooperative banks for the purpose of their day-to-day functioning, require the amount which they have invested in FDRs on their maturity. Should they wait till the criminal cases are over? Should they be pushed to institute civil suits? They can indisputably be compensated by grant of interest. What, however, happens if in the meanwhile in the absence of the requisite funds being available to them, they find it difficult to run the day-today affairs? 46. Answers thereto may be difficult to find out it is not a wholly impossible task. We think that the appellant Bank being "State" within the meaning of Article 12 of the Constitution of India with the assistance of officer(s) of the Central Bureau of Investigation should make all attempts to ascertain as to which of the cooperative societies / cooperative banks are in no way involved with the scam, and subject to such precautions as may be found necessary to be taken, release the amount in their favour. 47. In any event, the quantum of the amount which all the depositors would have otherwise received, in the event their investment in FDRs is found to be genuine, should be informed thereabout. Once the liability of the bank is determined, the Bank may invest the said amount in its own account and issue fresh FDRs therefor. Whereas the bank may keep the original FDRs with itself, it may issue the duplicate copies thereof to the eligible cooperative bank. Such an exercise should be completed within a period of four weeks from date. 48. In the event, the cooperative society intending to avail loan facilities from the banks for running their business, may approach them, which may apart from usual conditions release the same on a further condition that the amount of FDRs would remain with them and on that basis, loans may be granted of such amount. The usual precautions in regard thereto may also be taken by the bank(s). 49. We, while saying so, do not intend to lay down any law. The usual precautions in regard thereto may also be taken by the bank(s). 49. We, while saying so, do not intend to lay down any law. These directions should not be treated to be precedent. We are issuing these directions keeping in view that the factual scenario obtaining in the case and that non- release of the amount is likely to enure hardships that may be faced by the cooperative societies. We would also direct the criminal court to dispose of the criminal cases pending before them with utmost expedition. These appeals are allowed with the aforementioned directions. There shall, however, be no order as to costs." 5. In view of the aforestated observations / directions, the learned Senior Advocate Mr. Bhaskar Tanna for the petitioners in the instant petitions submitted that the facts of the present petitions being similar to the facts of the petitions filed by the cooperative societies / Banks, similar directions as given by the Supreme Court in the above stated order, be issued in the present petitions also. However, the learned advocate Mr. Darshan M. Parikh for the respondent Bank submitted that the petitioners are not entitled to any relief as there are disputed questions of facts involved. According to him, in the said appeals before the Supreme Court, the rights of the Cooperative Societies were not decided, on the contrary the appeals filed by the Banks were allowed. He also submitted that the Supreme Court had clarified in the said order that the directions be not treated as the precedents. 6. In the instant case, as stated earlier, some fraud / scam was found to have been committed in respect of the FDRs in question of the petitioners and other Cooperative Banks / Societies, which had resulted into the investigation and in turn filing of criminal cases against the persons found prima facie involved including some of the Bank officers. Some of the said cases are already disposed of while some are still pending. Hence, in the opinion of the Court, the cases of the petitioners being exactly similar to the cases of Cooperative Banks / Societies, similar directions as given by the Supreme Court in the aforestated order in the cases of Cooperative Societies / Banks deserve to be given in the present petitions also. 7. Hence, in the opinion of the Court, the cases of the petitioners being exactly similar to the cases of Cooperative Banks / Societies, similar directions as given by the Supreme Court in the aforestated order in the cases of Cooperative Societies / Banks deserve to be given in the present petitions also. 7. It is therefore, directed that in the event, quantum of amount which the petitioners - depositors would have otherwise received, and in the event their investment in the Fixed Deposits Receipts is found to be genuine, should be informed thereabout by the respondent Bank. Till the time, the liability is determined, the Bank may invest the said amount in its own account and issue fresh Fixed Deposits Receipts therefor. Whereas the Bank may keep original Fixed Deposits Receipts with itself, it may issue duplicate copies thereof to the eligible petitioners. Such an exercise should be completed within a period of eight weeks from today. In the event, the petitioners intend to avail loan facilities from the respondent - Bank, they may approach the Bank, which may apart from usual conditions, release the same on a further condition that the amount of Fixed Deposits Receipts would remain with the Bank and on that basis, the loan may be granted of such amount. The usual precautions in regard thereof may also be taken by the respondent Bank. 8. Subject to the aforesaid directions, all the petitions are disposed of. Further Order : Learned advocate Mr. Parikh for the respondent Bank requests to stay the implementation of the directions given by the Court, to which the learned Senior Advocate Mr. Tanna for the petitioners objects. Having regard to the reasons stated in the judgment, the said request is rejected.