INDIAN BANKS versus GODHARA NAGRIK COOP CREDIT SOCIETY LTD. & ANR. ETC. ETC.

Citation: [2009] 4 S.C.R. 1036 · Decided: 24-03-2009 · Supreme Court of India · Bench: S.B. SINHA, LOKESHWAR SINGH PANTA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2009] 4 S. C.R. 1036 
,.,.. 
A 
INDIAN BANK 
'1' 
v 
GODHARA NAGRIK COOP CREDIT SOCIETY LTD. & 
ANR. ETC. ETC. 
I.A. No. 1 In Civil Appeal No. 3303 of 2005 
B 
MARCH 24, 2009 
( S.B. SINHA AND LOKESHWAR SINGH PANTA, JJ ) 
A. 
BANKS/BANKING: 
~ 
c 
Indian Bank - Scam pertaining to FDs of Co-operative 
Societies/Cooperative Banks - Directions given by Supreme 
Court in its judgment dated 16.5.2008* - Clarification of -
HELD: Direction contained in Para 20 of the judgment to the 
extent that 'the bank with the assistance of Officer of the Central 
D Bureau of Investigation should make all attempts to ascertain 
-+ .. 
as to which of the cooperative societies and cooperative banks 
are in no way involved in the scam', shall not apply to the cases 
of Indian Bank - Indian Bank, however, in the interest of 
cooperative societies whose FDRs are lying in deposits and 
E who have availed the loan facilities, shall on its own identify 
and ascertain the societies that are not involved in any CBI 
investigation/case and on such ascertainment and verification, 
~ -
the cooperative societies-depositors shall be informed 
regarding the maturity of their FDRs - If the maturity amounts 
F 
of the FDRs are adjusted against the loan amount advanced 
to the cooperative societies and if there exists any dispute 
between the depositor-societies and Indian Bank about the 
recovery or payment of the money, the aggrieved party can 
get its claim adjudicated through appropriate proceedings 
before the appropriate forum as permissible under law- If there 
+ 
G is no dispute in regard to the payment of amount of matured 
FDRs, Indian Bank shall not debar or preclude the innocent 
cooperative societies-depositors from taking loan against 
FDRs being deposited with the Bank - It is made clear that 
the judgment dated 16. 05. 2008 shall stand clarified to the 
H 
1036 
INDIAN BANK V. GODHARA NAGRIK COOP 
1037 
CREDIT SOCIETY LTD. & ANR. ETC. ETC . 
... \ 
extent it pertains to the cases of Indian Bank- This clarification A 
will however, not dilute or affect other directions issued in the 
final judgment. 
*Indian Bank Vs. Godhara Nagrik Coop Credit Society 
Ltd. & Anr. Etc. etc.2008 (9) SCR 450 = 2008 (7) SCALE 363 B 
- clarified. 
...... , 
Case Law Reference 
1-
2008 (9) SCR 450 
clarified 
para 3 
CIVIL APPELLATE JURISDICTION : I. A. No. 1 In Civil c 
Appeal No. 3303 of 2005 
From the Judgement and Order dated 01.10.2003 of the 
High Court of Gujarat at Ahmedabad in Letters Patent Appeal 
. ~ ,,._ 
No. 258 of 2000 . 
D 
WITH 
I. A. No. 1 In Civil Appeal No. 3336 of 2005 
I. A. No. 1 In Civil Appeal No. 3337 of 2005 
E 
I. A. No. 1 In Civil Appeal No. 3338 of 2005 
-~ ' 
Ajay Kumar, Anuradha Dubey Mishra, Vikram, Himanshu 
Munshi, Pramod B. Agarwala, Praveena Gautam, for the 
Appellant. 
F 
K. Radhakrishnan, Aniruddha P. Mayee, K.S. Rathod, 
Sanjeev Kumar Choudhary, Navin Prakash, A Deb Kumar, B.V. 
Balaram, for the Respondents. 
' 
-+ 
The order of the Court was delivered : 
G 
1] Indian Bank has filed these applications praying for 
clarification of certain directions contained in the final judgment 
dated 16.05.2008 of this Court in Civil Appeal No. 3303/2005 
.. 
along with Civil Appeal Nos. 3336, 3337, 3338 and 3304-3335 
of 2005. 
H 
1038 
SUPREME COURT REPORTS 
[2009] 4 S.C.R. 
A 
2.1] Respondents herein are cooperative societies 
registered under the Cooperative Societies Act. They 
deposited certain amounts in cash in fixed deposits of Banks 
wherefor Fixed Deposit Receipts (FDRs) were to be issued. 
Such deposits were made through some so-called Commission 
B Agents of the Banks on payment of huge commission which is 
ordinarily not allowed by the Nationalized Banks. 
2.2] Applications for grant of loans by various persons were 
filed before the prescribed authorities of the banks on the basis 
of the said FDRs. Allegedly a large number of officers of the 
C banks were involved in a scam whereby unofficial investments 
of the said amount were being made. 
2.3] As and when the FDRs matured, the investors 
requested the Banks for their encashment. The banks refused 
to accede thereto stating that the amount under the FDRs had 
D already been paid by way of loans and, thus, no further amount 
was payable. It was contended that a fraud on the banks has 
been practiced to which the depositors and the officers of the 
banks were parties. 
E 
2.4] Writ petitions were filed. A learned Single Judge of 
the High Court opined that serious disp
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