The Delhi High Court on Friday sought the Reserve Bank of India’s stand on a plea that various banks and financial institutions had extended huge loans to certain group of companies without due scrutiny.
The Division Bench of Acting Chief Justice Vipin Sanghi and Justice Navin Chawla was dealing with a public interest litigation claiming that since the nationalized banks and financial institutions deal with public money, the loans which have gone bad concerns the public at large.
The Bench, while issuing notice to the RBI, asked the nodal agency responsible for regulating the functioning of banks and financial institutions in India to disclose in its affidavit the steps already taken as well as the steps it proposes to take in light of facts stated in the instant petition.
Further, the Bench directed the Centre to file its response disclosing the result of any preliminary enquiry which may have been done by it in respect of the issue at hand while clearly setting out whether the said enquiry revealed commission of any cognizable offence by any person.
The matter will next be heard on September 8, 2022.
The petition has been filed by Advocate M.S. Khan on behalf of one Ankur Gupta, who is a wholesale dealer of Indian apparels. The petitioner has approached the court against the inaction of the authorities concerned in initiating an investigation against entities that have obtained huge amount of loans on the basis of fictitious trade transactions, over-valued immovable assets and non-existent shell companies, which then re-route the money back to them through various firms and companies.
In light thereof, the plea sought a direction to the Centre, Delhi Government, Enforcement Directorate, Financial Intelligence Unit-India, Commissioner of Income Tax as well as the Central Bureau of Investigation to take swift action against the alleged persons and entities who have swindled huge amounts from banks and financial institutions.
The Division Bench headed by Justice D.N. Patel, former Chief Justice of the Delhi High Court, had in January last year issued notice in the matter and sought response from the Centre, Delhi Government, ED, FIU-Ind, Commissioner of Income Tax and CBI, among others.
During the course of hearing today, the Bench noticed that RBI, which is the banking regulator, has not been impleaded as a party respondent in the matter and thereby directed the petitioner to take necessary steps in this regard.
The counsel representing CBI informed the Bench that as per due procedure, complaints have been forwarded to the vigilance officers of each bank and proper investigation would be initiated once these officers send their reports thereon.
On the other hand, the counsel representing the FIU-Ind, submitted that it is not an investigating body and no relief is sought against it. However, the Bench remarked it may not be an investigating agency, but if an alleged scam is brought to its notice, then it must take some action being a part of the Central Government.