Supreme Court Quarterly Digest On Banking Law [Jan-March, 2023]

Adverse inference cannot be drawn against a plaintiff merely because he did not produce his bank passbook. Basavaraj v. Padmavathi, 2023 LiveLaw (SC) 17 : AIR 2023 SC 282 : (2023) 4 SCC 239'Any' means 'All' : Supreme Court says Centre can demonetise all series of bank notes invoking Section 26(2) of RBI Act. Vivek Narayan Sharma v. Union of India, 2023 LiveLaw (SC) 1 : (2023) 3 SCC 1 : (2023) 1 SCR 1Audi alteram partem - The application of audi alteram partem cannot be impliedly excluded from the Master Directions on Frauds - The principles of natural justice demand that the borrowers must be served a notice, given an opportunity to explain the conclusions of the forensic audit report, and be allowed to represent by the banks/ JLF before their account is classified as fraud under the Master Directions on Frauds. State Bank of India v. Rajesh Agarwal, 2023 LiveLaw (SC) 243Borrower has to pre-deposit 50% of which amount in appeal before drat u/s 18 SARFAESI Act? The Supreme Court explains. Sidha Neelkanth Paper Industries Pvt. Ltd. v. Prudent ARC Ltd; 2023 LiveLaw (SC) 11 : AIR 2023 SC 368Borrowers have right to be heard before their accounts are classified as fraud - the decision to classify the account as fraudulent must be made by a reasoned order - Since the RBI's Master Directions do not expressly provide for an opportunity of hearing to the borrower, audi alteram partem must be read into the provisions to save them from the vice of arbitrariness. State Bank of India v. Rajesh Agarwal, 2023 LiveLaw (SC) 243Burden is on borrower to prove that secured properties are agricultural lands. K. Sreedhar v. Raus Constructions Pvt. Ltd., 2023 LiveLaw (SC) 13 : AIR 2023 SC 306Central Government proposes demonetisation - it must seek the opinion of the Central Board of RBI as RBI is the sole authority to regulate circulation of bank notes and secure monetary stability and generally operate the currency and credit system of the country and to maintain price stability - opinion of the Central Board ought to be an independent and frank opinion - the Central Government can move ahead with demonetisation irrespective of positive or negative opinion of the Central Board, but by enacting a legislation or by way of an Ordinance and not an executive notification. [Para 21] [Dissenting Opinion] Vivek Narayan Sharma v. Union of India, 2023 LiveLaw (SC) 1 : (2023) 3 SCC 1 : (2023) 1 SCR 1Code of Civil Procedure, 1908; Order XXI - Liability to pay interest on money deposited by judgment debtor - If the amount is deposited, or paid to the decree holder or person entitled to it, the person entitled to the amount cannot later seek interest on it - This is a rule of prudence, inasmuch as the debtor, or person required to pay or refund the amount, is under an obligation to ensure that the amount payable is placed at the disposal of the person entitled to receive it. Once that is complete (in the form of payment, through different modes, including tendering a Banker’s Cheque, or Pay Order or Demand Draft, all of which require the account holder / debtor to pay the bank, which would then issue the instrument) the tender, or ‘payment’ is complete. (Para 31) K.L. Suneja v. Manjeet Kaur Monga, 2023 LiveLaw (SC) 68 : AIR 2023 SC 705Constitution of India, 1950; Entry 36 of List I of the Seventh Schedule - power of Central Government to demonetise banknotes - Central Government has the power to demonetise ‘all’ series of bank notes of ‘all’ denominations, even without the recommendation of Central Board; but not in exercise of Section 26(2) - such an extensive power is to be exercised only through a legislative process [legislation/Ordinance (if urgent)] and not by way of an executive act - the Parliament should be involved in the process of implementation of such a scheme of demonetisation. [Para 15.13, 15.4 and 15.22] [Dissenting Opinion] Vivek Narayan Sharma v. Union of India, 2023 LiveLaw (SC) 1 : (2023) 3 SCC 1 : (2023) 1 SCR 1Court Deposit - Courts / Tribunals should mandatorily deposit amounts deposited by litigants with the Registry or Office in a bank account - Supreme Court issues directions - All courts and judicial forums should frame guidelines in cases where amounts are deposited with the office / registry of the court / tribunal, that such amounts should mandatorily be deposited in a bank or some financial institution, to ensure that no loss is caused in the future - These guidelines should be embodied in the form of appropriate rules, or regulations of each court, tribunal, commission, authority, agency, etc. exercising adjudicatory power. (Para 35) K.L. Suneja v. Manjeet Kaur Monga, 2023 LiveLaw (SC) 68 : AIR 2023 SC 705Court Deposit - The Supreme Court directs all courts/tribunals to mandatorily deposit amounts deposited by parties with registry in a bank/financial institution. K.L. Suneja v. Manjeet Kaur Monga, 2023 LiveLaw (SC) 68 : AIR 2023 SC 705Demonetisation decision making process valid, Supreme Court holds by 4:1...

Supreme Court Quarterly Digest On Banking Law [Jan-March, 2023]

LIVELAW NEWS NETWORK

Tags