RESERVE BANK OF INDIA versus GM, COOPE. BANK DEPOSIT AJC HR. SHA & ORS.

Citation: [2010] 9 S.C.R. 1107 · Decided: 12-08-2010 · Supreme Court of India · Bench: H.S. BEDI, C.K. PRASAD · Disposal: Appeal(s) allowed
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Judgment (excerpt)

[2010] 9 S.C.R. 1107 
RESERVE BANK OF INDIA 
v. 
GM, COOPE. BANK DEPOSIT AJC HR. SHA & ORS. 
(Criminal. Appeal No. 1486 of 2004 ) 
AUGUST 12, 2010 
[HARJIT SINGH BEDI AND CHANDRAMAULI KR. 
PRASAD, JJ.] 
Code of Criminal Procedure, 1973: 
s.439 - Bail granted by Magistrate to Ex-Chairman of a 
Co-operative Bank in a case of misappropriation of the 
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B 
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· amounts deposited in the Bank -
Order challenged by 
depositors - High Court though not cancelled the bail, but 
directed the Bank to pay the amounts received by it from 
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several accused persons to the poor depositors who have 
invested not more than Rs.10,0001- with the Bank - Reserve 
Bank of India challenging the said directions - HELD: Far 
reaching consequences of the directions of the High Court are 
way beyond the scope of an application for bail filed by an 
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accused uls 439 CrPC and the High Court, as much as 
anyone else, must stay confined to the issues relevant to the 
matter before it - It was thus not open to the High Court to 
pass orders which could affect the working of Banks all over 
the country - The orders dated 20.12.2002 and 7.2.2003 
passed by the High Court set aside ~ Banks/Banking -
Banking. Regulation Act, 1949. 
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal 
No. 1486 of 2003. 
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From the Judgment and order dated 07.02.2003 of the 
High Court of Gujarat at Ahmedabad in Criminal Miscellaneous 
Application No. 284 of 2003. 
1107 
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1108 
StJPREME COURT REPOR'TS 
[201 OJ 9 S.C.R. 
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WITH 
Crl. A. No. 24 of 2005 
Basava Prabhu S. Patil, Kuldeep S. Parihar, H.S. Parihar, 
Hemantika Wahi, Rajiv Shankar Dvivedi, H.A. Raichura for the 
B appearing parties. 
The following order of the Court .was delivered 
ORDER 
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1. We have heard learned counsel for the appellant which 
is the Reserve Bank of lndi~ in this case. 
2. The appellant is aggrieved by the order dated 20th of 
December, 2002 whereby a direction has been issued by the 
o learned Single Judge in an application for bail under Section 
439 of the Code of Criminal Procedure made by an accused 
that depositors who had made deposits of less than Rs. 10,000/ 
- should have their deposits released as and when funds were 
received by the respondent No. 3 - cooperative bank. 
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3. In this case, an application for bail was made by some 
of the accused in Cr. No. 121 /2002 of Naranpura Police 
Station in respect of an offence alleged to have been committed 
by respondent No. 3, the Ex-Chairman of the Bank, respondent 
No. 4. Bail was granted by the Magistrate vide order dated 22nd 
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February, 2002. This order was challenged by the depositors 
before the High Court. The High Court, however, did not cancel 
the bail granted to respondent No. 3 but made a consequential 
order on 20/12/2002. This order is reproduced below:-
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"At this stage, learned counsel Shri Prajapati 
appearing for the depositors rightly made a grievance that 
so far poor depositors are not paid by the bank out of the 
amount, which has been received by the bank. If it is so, 
then it is most unfortunate Mr. Munshaw tried to explain that 
the said amount is used by paying salary etc. of the bank 
RESERVE BANK OF INDIA v. GM, COOPE. BANK 1109 
DEPOSIT AJC HR. SHA & ORS. 
·-
employees. This amount should not have been used by the 
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bank authorities for any other purpose except distributing 
the same amongst the poor depositors. Mr. Prajapati for 
the depositors association has pointed out that there are 
more than 75,000 depositors. Out of that, number of 
depositors are poor persons who have invested their life 
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time saving in the bank. He, therefore, requested the court 
that the bank should start paying the amount to the 
depositors who have invested not more than Rs. 10,000/ 
- at the first instance. There is lot of substance in what has 
been submitted by Mr. Prajapati for the depositors. c 
Accordingly, the bank should start distributing the amount, 
which is so far recovered by them from the accused under 
the interim orders of this Court. On the next date of hearing 
the bank shall furnish the details of the money being paid 
to the poor depositors, who have invested not more than 
0 
Rs. 10,000/- at the first instance. On the next date of 
.hearing, al! the accused as well as 1.0. Al')d Administrator 
of the bank shall personally remain present at 2:15 P.M. 
before this Court." 
4. The Reserve Bank of India has challenged the operative 
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portion of this order as being beyond the scope of
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