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2020 (1) TMI 171 - HC - Indian LawsLegality and validity of directives issued by the Chief General Manager, Reserve Bank of India, Mumbai dated 23rd, 24th, 26th September, 2019 and 3rd and 14th October, 2019 - withdrawal of restrictions imposed in exercise of its power conferred under Section 35A of the Banking Regulation Act, 1949 - restriction on withdrawal of amount from Bank - HELD THAT:- The overriding power of the RBI under section 35A enables it to record a satisfaction and to take measures so as to prevent the affairs of the bank being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company. We think that on the basis of the available material, the RBI was rightly satisfied that such protective measures are indeed necessary and therefore, it must issue the directions. Further, it has been stated by the RBI in its affidavit that upto 78% of the depositors could withdraw their entire deposits despite these protective measures. We do not think that we can, in writ jurisdiction, substitute the opinion or satisfaction of the RBI with our order or direction, much less to the contrary. We possess no experience and expertise in financial and fiscal matters. In matters of banking practices and the business of banking and its regulation, we must leave everything to the wisdom of the RBI. In fact, the presumption is that it will prevent the acts conducted in a manner prejudicial to the interest of depositors. We do not think that any proof to the contrary has been placed before us and on the sketchy materials in the form of averments and allegations, which are sweeping and general, we can not set aside the impugned directives. The RBI has deliberately not stepped in earlier or has stepped in belatedly in order not to protect the public interest or the interest of the depositors or the banking company, but allowed some of the officials, managing the affairs of the P&MC Bank, to get away We do not think that the RBI can be faulted for issuing the directions as are impugned in these petitions. We also cannot interfere with the limits placed by the RBI on the withdrawal. In fact, the RBI has acted fairly, justly and reasonably in revising the limits on withdrawal from time to time. When the first limit of ₹ 1,000/- was placed, the RBI was aware of the hardship and difficulty of depositors. In a timely manner, it has stepped in to enhance the limit and which is now enhanced as aforenoted. The aspects covered by the RBI regarding medical emergencies and education are such that in appropriate cases, depending upon the facts brought before the Administrator, he can allow the withdrawal up to specific limits - We do not think that the petitioners, styling themselves aggrieved investors and depositors, can complain. Each of these petitions have no merit and they deserve to be dismissed - no interference is permissible with the impugned directions of the RBI as they are based on the pre-requisites or the pre-satisfaction in terms of section 35A of the Act of 1949. Petition dismissed.
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