LexRESERVE BANK OF INDIA versus SAHARA INDIA FINANCIAL CORPORATION
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[2008] 9 S.C.R. 1110 A RESERVE BANK OF INDIA . 1 v. ' SAHARA INDIA FINANCIAL CORP. LTD. & ORS. (Civil Appeal No. 4193 of 2008) B JUNE 9, 2008 [DR. ARIJIT PASAYAT AND P.P. NAOLEKAR, JJ] FINANCIAL CORPORATION - Serious infirmities al- -I - leged against - Show Cause Notice issued by Reserve Bank c of India -- After considering the reply order passed by RBI re- straining the Corporation from accepting deposits from exist- ing and fresh depositors - High Court granting interim protec- tion to Corporation - HELD: Although principles of natural jus- tice have been followed, yet, in view of the nature of proceed- 0 ings and peculiar facts involved in the instant case, it would be appropriate for RBI to give an opportunity of hearing to the Corporation - Ordered accordingly - Order not to be treated ~ as precedent - Till matter is disposed of afresh, order dated ~ 4.6.2008 passed by RBI shall not be given effect to -At the E same time interim protection given by High Court to Corpora- tion shall not be operative - Entire matter disposed of - Ad- ministrative Law - Principles of natural justice - Opportunity of hearing - Interim order. CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4193 F of 2008 ~ ' From the Interim Order dated 5.6.2008 of the High Court of Judicature at Allahabad, Lucknow Bench, Lucknow in C.W.P. No. 5059 (MB) of 2008 G T.R. Andhyarujina, Ramesh Babu M.R., Manisha, Srinjoy Banerjee and Swati Setia for the Appellant. Mukul Rohtagi, Prashant Chandra, Ranjit Kumar, Uday U. Lalit, K.K. Lahiri, Satish Kishanchani, Gaurav Kejriwal and M. ? Keshav Mohan for the Respondents. H 1110 RESERVE BANK OF INDIA v. SAHARA INDIA 1111 .. r FINANCIAL CORP. LTD. [DR. ARIJIT PASAYAT, J.] .. The Judgment Order of the Court was delivered by A DR.ARIJIT PASAYAT,J. Leave granted. Heard the learned counsel for the parties. The challenge in this appeal is to the order passed by the B ~ r Division Bench of the Allahabad High Court, Lucknow Bench granting interim protection to Respondent No.1. 2. Briefly stated factual scenario is as follows: A show cause notice was issued by the appellant on c 09 .05.2008 requiring the Respondent No.1 to show cause as to why certain actions proposed to be taken shall not be taken. A detailed reply, according to Respondent No.1, was filed on 02.06.2008. Respondent No.1 before the High Court took the ~ stand that before the show cause reply was submitted discus- ,.. sions were held on 20.5.2008. By the final order dated D 04.06.2008 Respondent No.1-Company has been restrained from accepting deposits from the existing depositors and fresh depositors. These were the main directions in addition to the other directions. In the writ petition filed before the High Court, it was stated that the writ petitioner did not get a fair opportunity E to present its case before the present appellant and, there- fore, it has affected a large number of employees, agents, staffs )>-- and the depositors. The High Court passed the impugned or- , der on 05.06.2008 staying the operation and the enforcement of the order dated 4.6.2008 impugned before it till further or- F ders of the High Court. The High Court has also indicated that since objection was taken to certain activities of Respondent No.1, they were directed to complete all the requisite formali- ties and follow the directions of the present appellant from ti.ne to time. The writ petitioner was prevented from accepting any G new deposit whose maturity will be beyond June, 2010. The ~ matter was directed to be listed in the last week of July, 2008. 3. Mr. T.R. Andhyarujina, learned senior counsel appear- ing for the Reserve Bank of India submitted that without even granting any opportunity to the appellant to place its case, an H 1112 SUPREME COURT REPORTS [2008] 9 S.C.R. ~ A interim order was passed by virtually allowing the writ petition, .. as by interim order in essence final relief sought for in the writ petition was granted. It was his stand that ample opportunities were granted to the writ petitioner and the various infirmities committed by the writ petitioner were highlighted in the show B cause notice and the impugned order before the High Court which warranted the action taken by the appellant. With refer- ence to the show cause notice dated 09/05/2008 and order '( dated 04/06/2008 it is submitted that several illegalities have been committed and there is total la
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