HC stays proceedings on pact in Diamond Bank case

The Gujarat High Court on Tuesday stayed the proceedings in the tripartite agreement signed between Diamond Jubilee Co-operative Bank, C R Patil and the Ahmedabad-based Shree Saumya Constructions for the sale of approximately 4.80 lakh sq mt land in Sachin.

Patil, a prominent BJP leader, is the prime accused in the Rs 56-crore Diamond Jubilee Co-operative Bank scam. Patil was released on bail after he gave an undertaking in the High Court that he would repay the entire loan amount of approximately Rs 50 crore to the bank.

Patel had assured the High Court that he would sell his properties, which include 4.80 lakh sq mt land in Sachin, 3800 flats, a farmhouse among others to repay the bank loan.

The Ahmedabad-based Shree Saumya Constructions expressed willingness to purchase the land at Sachin, following which a three-party memorandum of understanding (MoU) was signed and was sent to RBI for approval.

Meanwhile, the Diamond Bank Bachao Samiti, which represents the depositors of the beleaguered bank, challenged the MoU in the HC.

The Samiti, in its special civil application, appealed to the HC that the memorandum of understanding was signed without taking the interest of thousands of depositors into confidence and hence all proceedings be stayed.

The Samiti also stated that it was not aware of the various terms and conditions of the agreement.

In its appeal the Samiti sought the details of how Shree Saumya Constructions would pay Rs 50 crore to Diamond Jubilee Bank, who would pay the necessary stamp duty for the land transfer and whether the Reserve Bank of India's approval had been sought for the tripartite agreement.

In response to the Samiti's application, the HC issued notices to state government, Diamond Jubilee Bank's administrator, District Registrar, C R Patil and Shree Saumya Constructions on Tuesday.

The High Court has also specifically directed the bank's administrator not to accept any payment from Shree Saumya Constructions for the 4.80 lakh sq mt land in Sachin, without the court's permission.

The high court would further hear the case on June 15.