Supreme Court Annual Digest 2022-Banking Law

Banking - The Bank employee always holds the position of trust where honesty and integrity are the sine qua non. (Para 11) United Bank of India v. Bachan Prasad Lall, 2022 LiveLaw (SC) 164 : AIR 2022 SC 943 : (2022) 4 SCC 358 Banking Companies (Period of Preservation of Records) Rules, 1985 - FERA Proceedings initiated against Banks - Show causes notices issued in the year 2002, i.e., after a period of almost one decade from the date of the alleged transactions of 1992-1993, were not tenable in law - The Banks are required to preserve the record for five years and eight years respectively - Permitting the show cause notices and the proceedings continued thereunder of the transactions which have taken place much prior to eight years would be unfair and unreasonable. Union of India v. Citibank NA, 2022 LiveLaw (SC) 704 Banking Law - Bank’s Liability for acts of employees - Acts of bank/post office employees, when done during their course of employment, are binding on the bank/post office at the instance of the person who is damnified by the fraud and wrongful acts of the officers of the bank/post office. Post office / bank, can and is entitled to proceed against the officers for the loss caused due to the fraud etc., but this would not absolve them from their liability if the employee involved was acting in the course of his employment and duties. (Para 37) Pradeep Kumar v. Post Master General, 2022 LiveLaw (SC) 139 : (2022) 6 SCC 351 Banking Law - Bank’s Liability for acts of employees - What is relevant is whether the crime, in the form of fraud etc., was perpetrated by the servant/employee during the course of his employment. Once this is established, the employer would be liable for the employee’s wrongful act, even if they amount to a crime. Whether the fraud is committed during the course of employment would be a question of fact that needs to be determined in the facts and circumstances of the case. (Para 38) Pradeep Kumar v. Post Master General, 2022 LiveLaw (SC) 139 : (2022) 6 SCC 351 Banking Regulation (Amendment) Act, 2020 - Transfer Petitions filed by RBI - All the writ petitions which have been filed before the High Courts challenging the validity of the Banking Regulation (Amendment) Act 2020 and/or the circular dated 25 June 2021 shall stand transferred to the High Court of Madras. Reserve Bank of India v. Big Kancheepuram Cooperative Town Bank Ltd., 2022 LiveLaw (SC) 850 Constitution of India, 1950; Article 226 - The appellant was serving as a Branch Officer of a Bank. A complaint was made against him by one borrower of the Bank alleging that he had sanctioned the limit of loan of Rs.1,50,000/ which was later on reduced to Rs.75,000/ - when the borrower refused to give bribe demanded by him. The disciplinary proceedings were initiated against him. The inquiry officer held that most of the charges were proved. The disciplinary authority/Chairman of the Bank passed an order of removal of the appellant from service. The Appellate Authority dismissed the appeal filed by him. The Uttarakhand High Court also dismissed the writ petition confirming the order of removal from service. Partly allowing the appeal, the Supreme Court held that removal of service can be said to be disproportionate to the charges and misconduct held to be proved. Therefore, the High Court order was modified to the extent substituting the punishment from that of removal of service to that of compulsory retirement. Umesh Kumar Pahwa v. Uttarakhand Gramin Bank, 2022 LiveLaw (SC) 155 : AIR 2022 SC 1041 : (2022) 4 SCC 385 Consumer Protection Act, 1986; Section 2(1)(d)(ii) - Consumer complaint alleging premature encashment of Joint Fixed Deposit by bank in contravention of the terms and conditions is maintainable - A person who avails of any service from a bank will fall under the purview of the definition of a 'consumer' under the 1986 Act. As a consequence, it would be open to such a consumer to seek recourse to the remedies provided under the 1986 Act. (Para 19) Arun Bhatiya v. HDFC Bank, 2022 LiveLaw (SC) 696 Foreign Contribution (Regulation) Act, 2010; Section 12(1A) and 17(1) - Opening of main FCRA account in the designated bank as per the law made by the Parliament in that regard, cannot be brushed aside on the specious argument of some inconvenience being caused to the registered associations. (Para 76) Noel Harper v. Union of India, 2022 LiveLaw (SC) 355 : 2022 (5) SCALE 775 One Time Settlement Scheme - The borrower as a matter of right cannot claim that though it has not made the payment as per the sanctioned OTS Scheme still it be granted further extension as a matter of right - Bank mutually can agree to extend the time which is permissible under Section 62 of the 18 Indian Contract Act. State Bank of India v. Arvindra Electronics Pvt. Ltd., 2022 LiveLaw (SC) 908 : AIR 2022 SC 5517 One Time Settlement Scheme (OTS) - High Court...

Supreme Court Annual Digest 2022-Banking Law

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