PIL not a weapon to challenge financial decisions: RBI to Delhi HC

PIL not a weapon to challenge financial decisions: RBI to Delhi HC
PIL not a weapon to challenge financial decisions: RBI to Delhi HC

Public interest litigation (PIL) cannot be used as a “weapon to challenge financial or economic decisions”, the RBI has told the Delhi High Court opposing a plea against the surcharge on credit and debit card transactions.

The plea has alleged that the surcharge levied by the banks and the financial institutions on credit and debit card transactions was “illegal” and “discriminatory”.

The Reserve Bank of India (RBI) has urged a bench of Chief Justice G Rohini and Justice Sangita Dhingra Sehgal to dismiss the PIL.

“The decisions are taken by the RBI in exercise of its administrative/statutory powers and in public interest.

“The issues in the writ petition pertain purely to the economic policy of the state and the challenge to the same at the instance of a public-spirited person cannot fall within the parameters of PIL, as has been laid down by the Supreme Court from time to time,” the RBI submitted.

The response of the federal bank came on the PIL filed by advocate Amit Sahni who alleged that though Prime Minister Narendra Modi’s demonetisation move was beneficial, the decision to levy surcharge on credit and debit card transactions was “highly unfortunate”.

“The issue raised in the present petition almost affects everyone operating a bank account,” the plea said, adding that the “unlawful, unequal and arbitrary treatment is visible in the payment of petrol charges through credit and debit cards”.

The lawyer said that levying surcharge is not only illegal and discriminatory but it also promotes circulation of black money.

The RBI, however, refuted the petitioner’s contention and said that it has neither violated any fundamental right or any legal right of the petitioner or any citizen of India.

( Source – PTI )

Suicides by farmers: SC seeks response from Centre, states

Suicides by farmers: SC seeks response from Centre, states
Suicides by farmers: SC seeks response from Centre, states

The Supreme Court today sought responses from the Centre, state governments, union territories and the RBI to examine the likely reasons behind suicides by farmers.

A bench comprising Chief Justice J S Khehar and Justice N V Ramana asked them to respond within four weeks.

The bench said that it is a “sensitive matter” of larger public interest involving farmers throughout the country.

The court was hearing a plea filed by NGO Citizens Resource and Action and Initiative on issues related to farmers.

( Source – PTI )

Bombay HC asks RBI to consider issue of salary payment to teachers

Bombay HC asks RBI to consider issue of salary payment to teachers
Bombay HC asks RBI to consider issue of salary payment to teachers

The Bombay High Court today asked the RBI to consider the issue of payment of salaries to aided school teachers since it is disbursed through district cooperative banks which have been prohibited from depositing and exchanging old currency notes.

The Mumbai, Solapur, Nashik and Pune District Central Cooperative Banks had approached the high court challenging the RBI circular of November 14, restricting them from exchanging or depositing old currency notes of Rs 500 and Rs 1,000, which were declared as illegal tender under the government’s demonetisation move on November 8.

Solapur co-operative bank counsel V M Thorat today informed the court that the bank receives around Rs 95 crore from the state government for salaries of teachers in aided schools, but due to the circular the bank is not able to disburse the amount.

A division bench of Justices A S Oka and Anuja Prabhudessai asked the Reserve Bank to consider the issue.

“RBI needs to consider this issue. We cannot take this matter up on merits as the Supreme Court is already seized of the main contentions raised in the petitions, but this particular issue about teachers’ salaries can be looked into,” Justice Oka said.

“It is common knowledge that teachers of aided schools get their salaries from cooperative banks. We want to know how teachers will get their salaries now,” the court said.

Thorat informed the bench today that the banks have filed application in the apex court seeking clarification on whether the high court can hear the matter.

“The application along with the transfer petition filed by the Union government seeking for all petitions filed on the demonetisation issue to be heard by SC itself is posted for hearing on December 9,” the counsel said.

The high court then adjourned the cooperative banks’ petitions to December 14.

( Source – PTI )

Fin Min, RBI response sought on exchanging old notes

Fin Min, RBI response sought on exchanging old notes
Fin Min, RBI response sought on exchanging old notes

The Bombay High Court has sought response from the Finance Ministry and Reserve Bank of India on a PIL seeking extension of deadline for exchanging the demonetised notes.

A division bench of Justices Bhushan Gavai and Vinay Deshpande issued the notices yesterday while hearing a Public Interest Litigation (PIL), and posted the matter for further hearing after three weeks.

The petitioner, Urmila Wasudeo Kowe, said in her PIL that there should be more time to exchange old high denomination notes. The earlier deadline of November 24 to change the now defunct Rs 500 and Rs 1,000 notes has expired and many in rural areas and those from working class, could not change their hard earned money. For such segment, the time limit should be extended.

The Central government demonetised the old high currency notes with effect from November 8 midnight and granted time till November 24 to exchange old notes.

The labour, working class and migrant workers also have old notes and they are unable to deposit the same as many of them do not have bank accounts. It is not possible for them to reach to RBI and such persons should be allowed to exchange old notes from nationalised banks, the PIL said, while seeking such a direction to the RBI and the Centre.

Advocate Ashwin Ingole appeared for the petitioner.

( Source – PTI )

Demonetisation: Guj HC seeks response from Centre, RBI

Demonetisation: Guj HC seeks response from Centre, RBI
Demonetisation: Guj HC seeks response from Centre, RBI

The Gujarat High Court has sought response from the Centre and RBI on a PIL challenging the legality of demonetisation and exclusion of district cooperative bank account holders from exchanging or withdrawing currency notes.

A division bench of Chief Justice R Subhash Reddy and Justice V M Pancholi sought the response on a PIL moved by farmers’ body Gujarat Khedut Hitrakshak Samiti, and kept the matter for hearing on December 5, together with another PIL on the same issue by Bhavnagar District Cooperative Bank that was heard yesterday by the high court.

The petitioner raised the question on legality of Centre’s decision to demonetise Rs 500 and Rs 1000 currency notes, saying it cannot be carried out merely on the basis of a gazette but an Act is required to be passed through Parliament.

Citing the example of demonetisation carried out in 1978, the petitioner said the then Morarji Desai government had issued an ordinance and passed an Act in Parliament to make currency notes of Rs 1000, Rs 5000 and Rs 10,000 illegal.

“According to section 26 (2) of the RBI Act, only a certain series of currency notes of particular denominations can be demonetised, and not entire currency notes,” the petitioner said, adding that the government’s order is illegal and unconstitutional.

The petition also challenged the limitation imposed on bank account holders from limitation on withdrawals, saying that the Centre has no right to pass such an order.

It further said that DCCBs are on par with nationalised or private banks as all these banks registered with the RBI are guided by the same Act.

“All the banks have been registered under the same section of the RBI Act and hence, RBI cannot discriminate among them.

Rights taken away from the DCCBs to allow their account holders from withdrawing or exchanging currency notes are illegal,” the petitioner said.

( Source – PTI )

Bombay HC seeks RBI’s response on co-operative banks’ petition

Bombay HC seeks RBI's response on co-operative banks' petition
Bombay HC seeks RBI’s response on co-operative banks’ petition

Observing that prima facie there were some inconsistencies in the two circulars issued by the Reserve Bank to district co-operative banks on demonetisation issue, the Bombay High Court today sought RBI’s response to a batch of petitions filed by these banks.

The Mumbai and Solapur District Central Co-operative banks had approached the high court last week challenging the RBI circular of November 14, restricting them from exchanging or depositing old currency notes of Rs 500 and Rs 1,000 which were declared as illegal tender under the government’s demonetisation move on November 8.

A division bench of Justices A S Oka and M S Karnik also directed Additional Solicitor General Anil Singh to produce a copy of the transfer petition filed by the Union government in the Supreme Court.

Singh informed the high court that the Union government, in the transfer petition, has sought the apex court to direct for all petitions filed in various high courts in the country to be either heard by SC itself or any one HC.

He said the transfer petition has been posted for hearing on November 23.

“The contentions raised by the district co-operative banks in these petitions here are similar to the petitions pending before the Supreme Court,” Singh said.

Senior counsel Janak Dwarkadas, appearing for the Mumbai District Co-operative Bank, however, told the court that the petitions filed by the co-operative banks are different.

“We are not challenging the demonetisation scheme. We are just challenging the RBI circular,” Dwarkadas said.

The bench, while directing the Union government to produce the transfer petition tomorrow, said if the main petition filed in the Supreme Court covers the same contentions as raised in these petitions, then it would not hear the matter.

“You (Singh) produce the transfer petition tomorrow. We will see. The RBI should also respond. We are not saying you (RBI) are right or wrong but prima facie we feel there is some inconsistency between the two circulars issued by the RBI,” Justice Oka said.

( Source – PTI )

Cannot disclose details on release of new Rs 500 notes: RBI

Cannot disclose details on release of new Rs 500 notes: RBI
Cannot disclose details on release of new Rs 500 notes: RBI

The Reserve Bank of India today informed the Madras High Court that it cannot disclose details regarding the release of new Rs 500 denomination currency to the banks for distribution due to security reasons.

The submission was made by the counsel for RBI on a petition seeking a direction to the Registrar of Co-operative Societies to follow procedures laid down by RBI relating to demonetisation and permit cash withdrawal and exchange of old currencies in the societies.

After recording the submission, the court posted the matter for further hearing to November 28.

The High Court had on November 16 adjourned for today the hearing in the case after it sought to know from the RBI when new Rs 500 denomination currency would be made available in Tamil Nadu to ease the present cash crunch following demonetisation.

RBI had then submitted that it faced practical difficulties in transporting currency in view of seizure of over Rs 500 crore by poll authorities in Tamil Nadu two days before the 16 May Assembly election in three constituencies.

On permitting District Central Cooperative Banks to exchange the demonetised currencies, the counsel had submitted that “the decision to ban DCCBs from exchanging notes was made apprehending malpractices”.

( Source – PTI )

RBI to intervene in Tata-NTT Docomo case in HC

RBI to intervene in Tata-NTT Docomo case in HC
RBI to intervene in Tata-NTT Docomo case in HC

The Reserve Bank of India (RBI) today sought to intervene in the ongoing litigation in Delhi High Court between Tata Sons and Japanese telecom major NTT Docomo over the enforcement of a USD 1.17 billion arbitral award in favour of the foreign company.

The London Court of International Arbitration (LCIA) had made the award in favour of Docomo for Tata’s alleged breach of an agreement over their telecom joint venture (JV), Tata Teleservices Ltd (TTSL).

In November 2009, Docomo had acquired 26.5 per cent stake in TTSL for about Rs 12,740 crore. The two had also agreed that in case Docomo exits the venture within five years, it will be paid a minimum 50 per cent of the acquisition price.

Under the shareholding agreement between the two, Tata was obligated to find a buyer for Docomo’s shares in TTSL if the Japanese company exited, the condition the Indian company is alleged to have breached.

As per Tata, when it asked for RBI’s approval for payment of the damages, the central bank of the country had said the option was not valid and any payment would have to be made at fair market value.

Docomo had then moved Delhi High Court for enforcement of the award.

The lawyer for RBI today told Justice S Muralidhar, before whom the matter was listed, that it wanted to be heard also, but the plea was objected to by Docomo.

The court then asked RBI to file an application seeking intervention and listed the matter for hearing on December 1.

Tata Sons’ lawyer, meanwhile, told the court it had filed a formal rejoinder “dealing with and denying certain specific false and incorrect allegations made by Docomo” for the first time in a recent affidavit filed by Japanese firm.

Tata, in its reply, has said that Docomo has “wrongly, falsely and irresponsibly alleged” that the Indian company misrepresented to RBI the nature of payment to be made to the Japanese company under the award and urged the court to refuse enforcement of the award.

Docomo in its response has said that “failure to obtain RBI permission does not excuse contractual performance nor can it prevent enforcement of an award”.

( Source – PTI )

SC for disclosure of amount of outstanding loans, RBI resists

SC for disclosure of amount of outstanding loans, RBI resists
SC for disclosure of amount of outstanding loans, RBI resists

Default in repayment of loans running into “lakhs of crores of rupees” today prompted the Supreme Court to throw up the idea of making public the total outstanding amount without disclosing the defaulters names, but RBI resisted the proposal citing confidentiality clause.

“This information does make out a case. This is quite a substantial amount which is involved,” a bench, comprising Chief Justice T S Thakur and Justice R Banumathi, said after perusing the Reserve Bank of Indias list of companies and persons who had defaulted on bank loans of over Rs 500 crore.

Expressing concern over the ever-rising amount of loans “not being returned”, the bench said “people are taking thousands of crores and running away by declaring the company as insolvent, but poor farmers who take small amount of Rs 20,000 or Rs 15,000 suffer.”

“The total amount in default can be disclosed. Whoever be the defaulter, their names can be kept confidential but what is the total amount of default can be disclosed. Lakhs of crores of rupees are outstanding. Many of defaulters have more than Rs 500 crore and above to pay,” it said.

The bench also sought the assistance of Ministry of Finance and Indian Banks Association by making them parties and posted the matter for further hearing on April 26.

During the hearing, the RBI counsel cited provisions in the RBI Act and the Credit Information Companies (Regulation) Act, 2005, which mandate confidentiality of information.

The bench at the next hearing will be assisted by all the parties on the issues likely to be framed by them, including specifically the question whether “the total outstanding amount of loans defaulted can be disclosed or not.”

When advocate Prashant Bhushan, appearing for NGO Centre for Public Interest Litigation (CPIL), favoured disclosure of outstanding loan amount and cited the recent apex court verdict of December 2015 to claim that RBI has to provide all information, the federal banks counsel said that decision related to the Right to Information Act and would not apply in the case in hand.

( Source – PTI )

SC for making public the loan default amount, RBI opposes

SC for making public the loan default amount, RBI opposes
SC for making public the loan default amount, RBI opposes

The Supreme Court today favoured making public the total amount of outstanding loans given by banks to various individuals and entities and running into lakhs of crores of rupees as per the information provided to it by RBI in a sealed cover.

“This information does make out a case. This is quite a substantial amount which is involved,” a bench comprising Chief Justice T S Thakur and Justice R Banumathi said.

However, this was opposed by the Reserve Bank of India (RBI) which said there was a confidentiality clause and the figure will have its own impact if it is disclosed.

Noting that the issue was important, the bench said it will examine if the total amount of defaulting loans running into crores of rupees can be disclosed and asked the parties involved in the matter to frame various issues that could be debated.

The bench, which expanded the scope of the PIL, impleaded Ministry of Finance and Indian Banks Association as parties posted the matter for further hearing on April 26.

The petition, which was filed in 2003 by NGO Centre for Public Interest Litigation (CPIL), had originally raised the issue of loans advanced to some companies by state-owned Housing and Urban Development Corporation (HUDCO). The plea had said that about Rs 40,000 crore of corporate debt was written off in 2015.

Earlier, the Supreme Court had directed the RBI to provide a list of companies which are defaulters of bank loans of over Rs 500 crore while expressing serious concern over the rise in bad loans.

The apex court had also asked the RBI to provide within six weeks the list of companies whose loans have been restructured under corporate debt restructuring schemes.

The bench had expressed surprise that no concrete steps were taken for the recovery of loan from the defaulters.

While passing the order, the court had taken note of a report in a national daily about bad loans or non-performing assets (NPA) and the inability of the banks to recover them.

( Source – PTI )