Banking/NBFC
Bank Cannot Remit Funds Contrary To Customer Mandate: Supreme Court Upholds Madras HC Ruling Against Canara Bank
The Supreme Court on Tuesday held that Canara Bank could not unilaterally divert funds contrary to the instructions of its customer while deciding a dispute arising from a remittance transaction involving Archean Industries Pvt Ltd, Canara Bank Overseas Branch, and Goltens Dubai. A Bench of Justices J.B. Pardiwala and R. Mahadevan was hearing cross appeals arising from a judgment of the Madras High Court dated August 16, 2021. Holding that Canara Bank could not have remitted the amount to the...
ACJM Not Subordinate To CJM In Judicial Functions In SARFAESI Possession Proceedings: Bombay High Court
The Bombay High Court has held that an Additional Chief Judicial Magistrate is competent to entertain applications under Section 14 of the SARFAESI Act, ruling that the magistrate exercises judicial powers at par with a Chief Judicial Magistrate. Section 14 allows a secured creditor (bank/financial institution) to seek assistance from a magistrate to take physical possession of secured assets when a borrower defaults.A coram of Justice Urmila Joshi Phalke dismissed a criminal application filed...
Kerala High Court Holds ATM Fraud Losses Not Covered Under New India Assurance Policy, Dismisses Federal Bank Suit
The Kerala High Court has recently held that losses caused by fraudulent use of ATMs were excluded under the Banker's Indemnity Policy issued by New India Assurance Co. Ltd. to Federal Bank, setting aside a trial court decree that had directed the insurer to indemnify the bank.A Division Bench of Justice Sathish Ninan and Justice P. Krishna Kumar allowed the appeal filed by the insurance company and dismissed the bank's suit seeking indemnification under the policy. Federal Bank had filed a...
Single Judge Cannot Disregard Rulings Of Division Bench Under Guise Of Reference: Kerala High Court
The Kerala High Court on Wednesday held that a Single Judge is bound by decisions of Division Benches and Full Benches and cannot question or disregard a binding Division Bench ruling under the guise of making a reference. A Division Bench of Chief Justice Soumen Sen and Justice Syam Kumar V.M was dealing with a reference arising from a writ petition filed by Grids Engineers and Contractors, challenging proceedings initiated by Union Bank of India under Section 14 of the SARFAESI Act. The Bench...
Bank Cannot Cancel Confirmed Auction Sale Due To Pending DRT Proceedings: Kerala High Court
The Kerala High Court on 3 March held that a bank cannot unilaterally set aside a confirmed auction sale merely because proceedings challenging the sale are pending before the Debts Recovery Tribunal (DRT). A Division Bench of Justice Anil K Narendran and Justice Muralee Krishna S was considering an appeal filed by the legal heirs of Vinod M.A., an auction purchaser. The Court stated: “It is trite that the authorised officer of the Bank cannot set aside the sale which was already confirmed in...
Limited SARFAESI Auction Deferment To Preserve Subject Matter Within Supervisory Jurisdiction: Kerala High Court
The Kerala High Court on Monday upheld a Single Judge's two-week deferment of a SARFAESI auction, holding that the limited relief granted to preserve the subject matter did not exceed supervisory jurisdiction under Article 227 of the Constitution. A division bench of Justice Anil K Narendran and Justice Muralee Krishna S dismissed a writ appeal filed by Union Bank of India, observing that the single judge had not entered into the merits of the dispute. S.S. Glass World had approached the...
Delhi High Court Sets Aside Bank-Issued LOCs Against Pomegranate Coaters Directors and Guarantors
The Delhi High Court on 18 February set aside Look Out Circulars (LOCs) issued by Bank of Baroda against the directors and guarantors of Pomegranate Coaters Pvt. Ltd. Justice Purushaindra Kumar Kaurav was hearing petitions by the directors, promoters, and guarantors of Pomegranate Coaters, who had availed credit facilities from the bank.Following defaults, the bank initiated recovery proceedings under the SARFAESI Act and the Recovery of Debts Due to Financial Institutions Act, and...
Bombay High Court Quashes CBI FIR Against GTL Infrastructure Over ₹11,263 Crore Loan Restructuring
The Bombay High Court on 27 February quashed an FIR registered by the Central Bureau of Investigation (CBI) against GTL Infrastructure Ltd. (GTLIL) concerning alleged irregularities in the restructuring and assignment of loans from a consortium of 19 banks. A Division Bench comprising Chief Justice Shree Chandrashekhar and Justice Gautam A. Ankhad allowed GTLIL's writ petition and set aside the FIR dated 16 August 2023, which had alleged offences under Sections 120B and 420 of the IPC and...
Kerala High Court Says Writ Maintainable Against SARFAESI Notice Before Recovery Action In Housing Loan Dispute
The Kerala High Court has held that a writ petition filed by the legal heirs of a deceased borrower was maintainable at the stage of a Section 13(2) notice under the SARFAESI Act, since no measures under Section 13(4) had yet been initiated and their challenge also concerned the bank's alleged failure to transfer the insurance premium to the insurer. A Division Bench of Justice Anil K Narendran and Justice Muralee Krishna S was hearing an appeal filed by Prameela Devi and her two daughters, the...
Breaking | Bombay High Court Sets Aside Stay On Fraud Classification Proceedings Against Anil Ambani
The Bombay High Court on Monday allowed appeals filed by Bank of Baroda, Indian Overseas Bank and IDBI Bank, which had challenged a single judge's order staying fraud classification proceedings against Anil Ambani, the founder and chairman of the Reliance Group. The court set aside a single-judge's interim order that had recorded a prima facie finding of “serious defects” in the forensic audit relied upon by the banks.A Division Bench comprising Chief Justice Shree Chandrashekhar and Justice...
Auction Purchasers Cannot Remove EPFO Attachment As CERSAI Registration Came After EPF Dues Accrued: Kerala High Court
The Kerala High Court has recently dismissed a writ petition filed by auction purchasers seeking removal of attachments over a property purchased in SARFAESI proceedings conducted by Federal Bank. Justice Viju Abraham held that since the bank itself could not claim statutory priority under Section 26-E of the SARFAESI Act, the auction purchasers were not entitled to seek effacement of the EPFO attachment. The court noted that priority under Section 26-E arises only upon registration of...
Delhi High Court Condones Late Filing By Avantha Holdings, Applies “Parity” Against Bank's Own Delay
The Delhi High Court on 12 February condoned a 14-day delay by Avantha Holdings Limited in filing its written statement in recovery proceedings, holding that procedural fairness requires parity when the creditor bank itself delayed service of summons by nearly a month. A Division Bench of Justices Vivek Chaudhary and Renu Bhatnagar allowed a writ petition filed by Avantha Holdings against ICICI Bank Limited, observing that a tribunal cannot ignore substantial delay by one party while...