HC adjourns Dahod Bank case till Dec 18

The Gujarat High Court on Thursday adjourned the hearing of a writ petition filed by the Dahod Urban Co-operative Bank Ltd (DUCBL) against the Reserve Bank of India, Gujarat State Co-operative Bank (GSCB) and Panchmahal District Co-operative Bank (PDCB), to December 18 after hearing pleas of advocates of the parties.

DUCBL filed the writ petition seeking a writ of mandamus directing the RBI to pay the amount deposited by DUCBL with the PDCB.

Advocate H N Chhatrapati, while appearing for the RBI, submitted that he would require more time to file a reply.

Ajay Mehta, advocate for DUCBL, the petitioner, strongly opposed the plea, saying adequate time had already been given.

Justice C K Buch, after hearing both sides, adjourned the case until December 18.

Mehta said, "The final hearing of the case will begin only after a reply is filed by the respondents. However, I believe we have a strong case."

The Panchmahal District Co-operative Bank has been prohibited from transacting any business by the RBI, exercising powers under section 35 (A) of the Banking Regulations Act, 1949.

The Gujarat High Court had issued a show cause notice on October 21, 2003, but despite lapse of almost two months, none of the respondents had filed the affidavit-in-reply.

The matter was listed on November 29, 2003, when Justice C K Buch had noted it and directed the matter to be listed for hearing on Thursday.

The main contention of the petitioner is that as per the directives contained in section 18 of the Banking Regulations Act, DUCBL was forced by the RBI to deposit with Panchmahal District Bank as cash reserve and demand time liability amount.

The RBI had intimated the petitioner on May 25, 1998, that if it failed to comply with such directives, its licence would be cancelled.

In pursuance with the RBI direction, the petitioner had deposited the amount with the Panchmahal District Co-operative, repayment of which has been stayed by the Gujarat High court.