Landmark Judgments on Banking Laws FEMA & Banking Case Laws Supreme Court of India RDDB, SARFAESI, RBI, BRA Enactments

Discover the latest and greatest in FEMA, Banking, and Securitisation Laws with our expert analysis and explanations. Our team has compiled a list of landmark rulings that are the talk of the industry. Whether you’re looking for practical insights for professionals or settled positions of law, this must-read list has got you covered. Stay ahead of the game and don’t miss out on these trending case laws.

In this article, we will explore the significant rulings on banking laws made by the Indian Supreme Court and High Courts. These landmark judgments pertain to four key enactments in the banking sector, including the Banking Regulation Act of 1949, the Reserve Bank of India Act of 1934, the Recovery of Debts Due to Banks and Financial Institutions Act of 1993, and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act of 2002.

The case of Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir, decided on January 12, 2022, concerned the maintainability of a writ petition under Article 226 of the Constitution of India against an asset reconstruction company (ARC) and the passing of interim orders protecting the interest of the secured creditor. The two-judge bench of HM Justices M.R. Shah and B.V. Nagarathna, authored by HM Justice M.R. Shah, referred to several judgments and held that interim orders stalling or restricting proceedings under the SARFAESI Act cannot be passed, particularly when a large sum of money is involved. The court further ruled that ARC is a private financial institution and thus a writ petition against such entities is not maintainable since they are not performing public functions typically performed by State authorities. The court dismissed the judgments relied upon by the borrowers and held that filing of writ petitions is an abuse of the process of the court. Consequently, interim orders passed in favor of the borrowers were set aside.

In Pradeep Kumar v. Postmaster General (Delivered on February 7, 2022), a three-judge bench of HM Justices L. Nageshwara Rao, Sanjiv Khanna, and B.R. Gavai heard a challenge laid by the petitioner against the dismissal order of the National Consumer Dispute Redressal Court (NCDRC). The NCDRC had rejected the petitioner’s claim for compensation and interest under various heads for the illegal encashment of Kisan Vikas Patra (KVP) that they had purchased. The KVPs were illegally encashed through the post office at the instance of an agent named Ruksana, who was employed by the State of U.P. Ruksana misappropriated the cash payment made on the date of encashment to her personal benefit, and was eventually convicted for various offences under the Indian Penal Code (IPC).

The case examined the question of the vicarious liability of the post office for the faults attributable to its employees. The court examined various provisions of the Negotiable Instruments Act, 1881, including the definitions of “banker,” “holder,” “endorse,” “holder in due course,” and “payment in due course,” along with Sections 78 and 82 providing for the liability of the acceptor/endorser of the negotiable instrument concerned. The court held that compliance with standard bank practices was necessary to saddle the bank with the liability of payment to an incorrect entity/person. The scope of the banker’s protection under Section 131, NI Act was also elaborated upon, with reference to several precedents and judgments on the said aspect.

The court found that the post office was vicariously responsible for the fraud perpetrated by its employees and thus awarded compensation for the claimed amount along with interest and various heads to the petitioner claimant. The order of the NCDRC was set aside. It was held that the employee of the bank, Mr M.K. Singh, had acted irresponsibly and carelessly in disregard of the applicable procedure and provisions of KVP Rules, 1988. The court also referred to the Government Savings Certificate Act, 1959, pertaining to the transfer of NI, and held that no payment of the claimed amount could have been made through cash but could have been made only through cheque. The provisions of Rules 14 and 15 of the KVP Rules, 1988 were referred to hold that the post office was responsible for any loss caused to the holder by the fraud played by any person towards its encashment.

In the case of Bank of Baroda v. Karwa Trading Co., a 2-judge bench consisting of HM Justices M.R. Shah and Sanjiv Khanna delivered a judgment on February 10, 2022. The appeal was made to the Supreme Court against the order of the Rajasthan High Court, which directed the borrower to pay a portion of the outstanding amount to the bank. The bank was then directed to release the property and hand over its physical possession, along with the title deed, to the borrower. However, the borrower only deposited half of the total outstanding amount with the bank and requested the cancellation of the auction sale in order to regain possession of the property.

The court referred to the amended provisions of Section 13(8) of the SARFAESI Act and concluded that if the outstanding amount is paid by the borrower before the issuance of an auction notice, the secured asset cannot be sold or transferred by the secured creditor. Since the borrower in this case did not deposit the entire amount of dues with the secured creditor and was not ready to do so, they had no right to redeem the mortgaged property secured in favour of the bank. Therefore, the directions of the High Court were in contravention of the mandate of the amended provisions of Section 13(8) of the SARFAESI Act.

The court further held that the property could not be returned to the borrower or the bank forced to settle the outstanding amount at a lower value until and unless the borrower is ready and willing to deposit the entire amount along with all costs and expenses with the bank or the secured creditor. As a result, the judgment of the High Court was set aside.

On February 14, 2022, in the case of Union Bank of India v. Rajasthan Real Estate Regulatory Authority, a 2-judge bench consisting of HM Justices M.R. Shah and B.V. Nagarathna delivered a judgment stating that in case of any conflict between the Real Estate (Regulation and Development) Act (RERA) and the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, the provisions of RERA shall prevail. However, RERA will not apply to transactions between borrowers and banks or financial institutions where security interest has been created by mortgaging the property before the introduction of the Act unless such transactions are found to be fraudulent or collusive. The court also held that RERA has the power to entertain complaints made by aggrieved persons against a bank acting as a secured creditor under Section 13(4) or any incidental provision of the SARFAESI Act.

The case of NKGSB Cooperative Bank Ltd. v. Subir Chakravarty, decided on February 25, 2022, dealt with the question of whether a District Magistrate or Chief Metropolitan Magistrate can appoint an advocate to take possession of a secured asset under Section 14(1)(a) of the SARFAESI Act, 2002. The Court looked at the phrase “may authorise any officer subordinate to him” and examined the different forms of subordination, including “functional subordination.” Referring to various judgments and statutory provisions, the Court held that an advocate can be appointed for the purpose of taking over the physical possession of secured assets and documents. The Court clarified that the job of the DM/CMM in this regard is purely ministerial and does not involve any quasi-judicial adjudicatory function. The Court set aside the view taken by the Bombay High Court and held that lawyers are functionally subordinate to the DM/CMM exercising power under Section 14. There is no prohibition on engaging any Advocate Commissioner for taking the position of the secured assets.

In the case of Punjab National Bank v. Union of India, the Supreme Court of India addressed the issue of whether the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) take precedence over the Central Excise Act, 1944, with regard to the realization of dues by a secured creditor for the Department of Customs and Central Excise (CCE).

The PNB had initiated proceedings under the SARFAESI Act to take over symbolic possession of a property, which was objected to by the CCE. The Court held that the power to confiscate the property under Rule 173-Q(2) of the Central Excise Rules, 1944 had been omitted in 2000 and had not been replaced with any new provision. Therefore, pending confiscation proceedings by the CCE were bound to lapse and fresh proceedings would have to be instituted under the altered/substituted procedure.

The Court held that the General Clauses Act, 1897 did not apply to the rule but applied only to a Central Act or regulation. The Court further stated that there was no enabling or positive statement giving first charge to the dues of the CCE over any other statutory due, and thus the said right could not be claimed by the Revenue.

Referring to the long line of judgments in Dena Bank v. Bhikhabhai Prabhudas Parekh & Co. and Central Bank of India v. Siriguppa Sugars & Chemicals Ltd., the Court held that the rights of a secured creditor under a statute are protected and take precedence over crown dues.

The Court held that in light of the provisions of Sections 2(f) and 2(1) (zc) to 2(zf) read with Section 13 of the SARFAESI Act, 2002, the secured creditor had a first charge on the secured assets and an overriding effect on all other laws. The judgment of the Allahabad High Court was set aside.

The case of Asset Reconstruction Co. (India) Ltd. v. Chief Controlling Revenue Authority involved a challenge to the Full Bench of the Gujarat High Court’s view on the extent of stamp duty on an assignment deed of debt in favour of an asset reconstruction company (ARC). The ARC was registered with the Reserve Bank of India and the assignment deed contained reference to an irrevocable power of attorney (PoA) that was chargeable to stamp duty under Article 45(f) of Schedule I to the Gujarat Stamp Act, 1958.

The Supreme Court held that no independent instrument of PoA was executed and that the power of sale of secured assets in favour of the ARC flowed out of the provisions of the SARFAESI Act, 2002. The Court also noted that stamp duty was exempted on any document executed by a bank in favour of an ARC for the purposes of asset reconstruction or securitisation, as per Section 5(1-A) of the Act.

The Court further held that two conditions had to be satisfied for Article 45(f) of Schedule I to apply: firstly, PoA should have been given for consideration, and secondly, an authorisation to sell any immovable property flowing out of the said instrument. The draft PoA appended to the assignment deed was only incidental to the deed of assignment, and not the principal instrument in itself. The deed of assignment was already charged to duty under Article 20(a) as a “conveyance”.

The Court held that since a single instrument had been charged under the correct charging provision of the statute, namely, Article 20(a) of Schedule I, the revenue could not be allowed to split the instrument into two only because of the reduction of stamp duty by a notification issued by the State Government under Section 9(a). Therefore, the view taken by the Full Bench of the Gujarat High Court was set aside by the Supreme Court.

In the case of Nedumpilli Finance Co. Ltd. v. State of Kerala, the issue before the court was whether non-banking financial companies (NBFCs) regulated by RBI could also be regulated by State enactments such as the Kerala Money Lenders Act and the Gujarat Money Lenders Act. The court held that the RBI Act takes a holistic approach to the business of banking, money lending, and operation of the currency and credit system of the country. The entire life of an NBFC is regulated and monitored by the RBI, and thus, the State of Kerala or any other State cannot step in or regulate even those features of NBFCs on which the RBI Act is silent. The court extensively referred to provisions of Chapter III-B of the RBI Act and the regulatory measures undertaken by the RBI from time to time pertaining to the NBFCs. The court also explained and elucidated the doctrines of eclipse, conflict, and repugnancy, and held that the provisions of the RBI Act override all State enactments, which cannot govern the operation and functioning of NBFCs.

In the case of R.D. Jain and Co. v. Capital First Ltd., the issue before the court was whether the term District Magistrate/Chief Metropolitan Magistrate (DM/CMM) under Section 14 of the SARFAESI Act, 2002 includes within its ken Additional District Magistrate or Additional Chief Metropolitan Magistrate also. The court held that the powers exercised by DM/CMM under Section 14 are purely ministerial in nature and can be exercised by the Additional CMM/DM. The court referred to the provisions of Sections 11, 12, 15, 16, 17, 19, and 35 of the Criminal Procedure Code and held that the powers exercisable by CMM are exercisable in equal capacity and equal role by the Additional CMM, who are on par with the former insofar as powers under CrPC are concerned. Therefore, the Additional CMM/DM cannot be treated as officers subordinate to the CMM/DM, to whom the powers can be delegated or to be allowed to exercise such powers through special orders in this regard. The contrary view taken by some of the High Courts as expressed by the Supreme Court was specifically overruled.

The case of Indian Overseas Bank v. RCM Infrastructure Ltd., decided on May 18, 2022, involved the impact of the Section 10 read with Section 14 moratorium under the provisions of the Insolvency and Bankruptcy Code, 2016 on the issuance of sale confirmation letter pending under Rule 94-A of the Security Interest Rules, 2002. The sale was confirmed in favour of the auction-purchaser, but the formal sale certificate could not be issued since 75% balance payment of the big amount was pending, which period was extended under Rule 94-A of the Rules of 2002.

The Court held that the provisions of the IBC shall have effect notwithstanding anything inconsistent with any other law for the time being in force, as per the provisions of Section 14 and 238 of the IBC. It was further held that Section 238 overrides and prevails over all other laws for the time being in force, including the provisions of the Transfer of Property Act, 1882, as well as the SARFAESI Act, 2002.

The sale in favour of the auction-purchaser was held to be a statutory sale, subject to the impact of Section 238 of the IBC, which rendered it incomplete without the receipt of outstanding part payment. Therefore, in view of the IBC moratorium, the sale could not have been confirmed and was rightly negated as null and void by the NCLT.

In Annam Steels (P) Ltd. v. Canara Bank Ltd., a single judge bench of the Kerala High Court considered whether fresh securitisation proceedings needed to be initiated by the bank or if they were entitled to continue the proceedings from the stage at which an order by the DRT was passed. The petitioner had borrowed loans from multiple banks, and proceedings were initiated under the SARFAESI Act and recovery proceedings were instituted by the banks before the DRT. The DRT directed the petitioner to pay a particular amount with pending lite and future interest @ 14 % p.a. The amount was received by the banks, but they began proceedings again for the outstanding amount. The court held that once an amount is declared as non-performing with the issuance of notice under Section 13(2), the borrower is obligated to discharge the entire liability to overcome the rigours of the Securitisation Act. A “partial discharge of the debt” is not sufficient to discharge the liability of the borrower, and part payment of the amount under whatever mode (even through court order) is also not sufficient to discharge the debt due. The court referred to previous judgments and held that the question of the difference of the amount may always be kept open and decided before the auction-sale of property, implying that DRT order does not terminate, till specifically mentioned the right of the bank to recover the outstanding due in the same proceedings. Therefore, the writ petition was dismissed.

In Bajaj Finance Ltd. v. Ali Agency, the court was dealing with the scope of remedies available to a secured creditor or bank in case of adverse orders passed against them by the District Magistrate under Section 14 of the SARFAESI Act. The court had to decide whether a writ petition was maintainable in view of the remedy provided under Section 17 of the SARFAESI Act, whether the Chief Judicial Magistrate would have the jurisdiction to entertain an application under Section 14, and the scope of exercise of jurisdiction by the authorities concerned while examining an application under Section 14 of the Securitisation Act.

In the case of SBI v. Tax Recovery Officer, the court considered the conflict between the provisions of the IT Act and the SARFAESI Act. The court held that Section 281 of the IT Act unambiguously prohibits all transactions or transfers made during the pendency of income tax proceedings, and that the mortgagee or secured creditor is expected to follow the principle of “caveat emptor” with the duty of the borrower to inform the secured creditor about the existence/pendency of the IT proceedings on the subject matter.

The court also referred to the doctrines of priority of crown’s debts and constitutional priority, which prioritize debts that are traceable and recognized under constitutional provisions. Taxation laws are constitutionally recognized, and the realization of taxes by the state is a sovereign function that must be accorded primacy over other private debts.

The court held that Sections 34 of the IDDB Act and Section 35 of the SARFAESI Act will only override other legislations when there is an inconsistency. If there is no inconsistency between two enactments, then there is no question of overriding other legislations. Thus, Section 281 of the IT Act was interpreted to mean that no mortgage should be created during the pendency of IT proceedings, which would render the entire mortgage void.

In the case of Mahipal Singh Yadav v. Union Bank of India, a 2-judge bench of the High Court of Delhi entertained a writ petition against orders passed by DRT, Jaipur due to the post of Presiding Officer in the office of DRAT (Debts Recovery Appellate Tribunal) being vacant. The appeals under Section 18 were entertained by the High Court in view of the directions of the Supreme Court through its order dated 16-12-2021.

The main issue in the case was about the consent of secured creditor as a precondition of sale of asset “below the reserve price” determined by the bank in terms of the Security Interest (Enforcement) Rules, 2002. The court referred to Rule 8(6), which fixes the reserve price as a benchmark below which the property may not be sold. If at any stage the secured creditor intends to dispose of the property at a value lesser than the same, it is mandatory to share the said offer with the borrower, without whose consent the sale could not be affected.

The court referred to the judgment of Seaford Court Estates Ltd. v. Asher and held that if any statutory provision is not very happily worded, is ambiguous, then the court must perform the constructive task of finding the intention of the Parliament (Legislature) for interpreting the written words in a way as to give “force and life” to the intention of the legislature. The court held that the whole purpose of undertaking the sale of immovable property through public auction/tender stands defeated if the authorised officer is required to obtain the consent for disposing of the property for a value equivalent or higher than the reserve price.

Accordingly, the court affirmed the order of DRT through which the request of the borrower to seek his consent prior to selling the mortgaged property at specifically the reserve price was rejected. The second proviso to Rule 9(2) becomes relevant and attracted only if the case is not covered by the first proviso, namely, where the amount offered towards sale price is equal to or more than the reserve price specified under Rule 8(5).

In the case of Amrik Singh v. DCB Bank Ltd., a petitioner approached the High Court against the rejection of their proposal for a one-time settlement by the bank, despite a substantial amount being deposited and a promise to deposit the remaining amount within a short period. The court considered various questions, including the maintainability of the writ petition, and held that it was maintainable since the bank was a scheduled bank governed by the Banking Regulation Act, 1949, and its OTS policy was binding on it pursuant to circulars and departmental orders issued by the RBI.

The court also held that since measures under the SARFAESI Act had not been initiated by the bank, the writ petition under Article 226 was maintainable. The court distinguished the case of Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir, which was held to be inapplicable, and held that DCB Bank, as an asset reconstruction company registered with the RBI, was amenable to writ jurisdiction under Article 226 of the Constitution of India.

The court noted that the petitioner had deposited a substantial amount of Rs 49 lakhs out of a total of Rs 85 lakhs, and held that his case was entitled to be considered sympathetically. The non-acceptance of the OTS proposal was held to be arbitrary, and the petitioner was entitled to an extension of the repayment date of the remaining amount along with an appropriate and reasonable rate of interest to settle the outstanding dues. The court directed the bank to act upon the OTS proposal of the petitioner.

The case Ballyfabs International Ltd. v. State of W.B. dealt with the issue of whether a sale conducted by an authorized officer under the SARFAESI Act, 2002 is an “open market sale” and thus excluded from the scrutiny under Section 47-A of the Stamp Act, 1899. The controversy arose when the Registrar of Assurance, Calcutta took a view that the price fetched at public auction by a statutory authority under the provisions of SARFAESI Act cannot be treated as the price in the open market sale and would have to be subjected to the scrutiny of Section 47-A of the Stamp Act. The petitioner argued that if the sale is conducted by an authorized officer, it is preceded by wide circulation in newspapers inviting prospective buyers, which is from the general public and thus cannot be treated as a private transaction.

The court analyzed the term “open market” and interpreted it as a market wherein supply and demand are explicitly in terms of the price determined between the seller and the purchaser in the ordinary course of trade. The expression “if sold in the open market” employed under Section 47-A clearly envisages that it is applicable only to private transactions between a private seller and an open buyer and not to open-market transactions. The court also held that the reserve price is entirely different from the concept of valuation and that the reserve price so fixed in any public auction is not at all relatable to the valuation of the property which it would fetch or would have fetched if sold in the open market.

The court held that the sale conducted by the authorized officer in exercise of the powers conferred under Rule 8 of the Security Interest (Enforcement) Rule, 2002 by public auction or by inviting tenders from the public would be regarded as the sale in the open market and the price so accepted shall be the price which it would fetch if sold in the open market under Section 47-A of the Stamp Act. The sale must be conducted by making a wide publication at least in one newspaper widely circulated in the particular city/town/district where the property is situated, and the authorized officer shall not have any relation or connection with the intending purchaser.

The case of HDFC Bank Ltd. v. Parwati Cotton involved the issue of whether an application under Section 14 of the SARFAESI Act, 2002 for procuring physical possession of the property can be filed directly before the District Magistrate/Chief Metropolitan Magistrate (DM/CMM) without first issuing a notice of taking over symbolic possession under Section 13(4) of the Act.

The court referred to the 2013 amendment to Section 14, which requires the submission of an affidavit under 9 points by the secured creditor along with the application under Section 14. The court held that the application is incomplete in the absence of the accompanying affidavits under 9 points.

The court also referred to previous Supreme Court judgments, which held that the borrower’s right to approach the Debt Recovery Tribunal (DRT) under Section 17 of the SARFAESI Act arises only after the issuance of a notice under Section 13(4) of the Act. The DRT can examine the validity of the measures taken only thereafter and not before.

Based on the above, the court remitted the matter back to the DM in Rajkot for fresh adjudication and decision, considering the amended provisions of Section 14 and the non-issuance of a notice under Section 13(4) of the SARFAESI Act by the secured creditor. The order passed by the DM was quashed and set aside.

In the case of Om Prakash Kumawat v. Hero Housing Finance Ltd., a single judge bench of HM Justice Mahendar Kumar Goyal held that proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 and those under the SARFAESI Act can run simultaneously. The court referred to previous judgments of the Supreme Court in M.D. Frozen Foods Exports (P) Ltd. v. Hero Fincorp Ltd. and Indiabulls Housing Finance Ltd. v. Deccan Chronicle Holdings Ltd. to explain that the provisions of the SARFAESI Act provide a remedy in addition to the provisions of the Arbitration Act, where liquidation of secured assets through a more expeditious procedure is what has been envisaged. These remedies are cumulative and not substitutionary. SARFAESI proceedings were held to be in the nature of enforcement proceedings, whereas arbitration is an adjudicatory process. The court further held that an order passed under Section 14 by the District Magistrate directing for taking over possession is an appealable order and that a writ petition cannot be preferred to challenge it.

Landmark FEMA & Banking case laws that may help you understand their significance and how they shape the legal landscape:

1. The Supreme Court delivered a significant ruling in the Vijay Madanlal Choudhary v. Union of India case, where it upheld the constitutional validity of the amended Section 45 and other relevant sections of the Prevention of Money Laundering Act (PMLA).
2. The Supreme Court’s verdict in the Arunachala Gounder v. Ponnusamy case held that in the event of an issueless and heirless female Hindu dying without a will, her inherited property shall revert back to the source.
3. As per the ruling in HDFC Bank Ltd. v. Union of India, the Supreme Court has established that a bank is entitled to file a writ petition under Article 32 of the Indian Constitution against directions issued by the Reserve Bank of India (RBI), which are based on a judgment passed by the Supreme Court.
4. In the Noel Harper v. Union of India case, the Supreme Court upheld the constitutional validity of the 2020 amendments made to the Foreign Contribution (Regulation) Act (FCRA). The court commended Parliament for taking timely corrective actions to address the concerns and issues raised in relation to the FCRA.
5. The National Company Law Appellate Tribunal (NCLAT) ruled in the case of C Ramasubramaniam Liquidator of Padmaadevi Sugars Ltd. v. Deputy Commissioner of Income-tax (Benami Prohibition) that attachments made under the Benami Transactions (Prohibition) Act can only be challenged or questioned under the provisions of the said Act.
6. In the Bank of Rajasthan Ltd. v. VCK Shares & Stock Broking Services Ltd. case, it was held that a civil court has the authority to entertain and try a borrower’s suit against a bank/financial institution. However, the court is not empowered to transfer the suit to the Debt Recovery Tribunal (DRT).
7. In the case of Chander Prakash Wadhwa v. State (NCT of Delhi), the Supreme Court directed the Trial Court to reconsider the bail plea afresh as the petitioner’s medical report revealed blockages of arteries. This ruling was made in connection with a case under the Prevention of Money Laundering Act (PMLA).
8. The High Court held in the case of Gautam Thapar v. Directorate of Enforcement that bail can only be granted to an accused under the Prevention of Money Laundering Act (PMLA) if the twin conditions laid down under Section 45(1) of the Act are satisfied.
9. In the Dilip Hariramani v. Bank of Baroda case, the Supreme Court ruled that there can be no vicarious liability of persons under Section 141 of the Negotiable Instruments Act, unless the entity in question has committed an offense as the principal accused.
10. The Supreme Court held in the case of Nedumpilli Finance Co. Ltd. v. State of Kerala that state laws such as the Kerala/Gujarat Money Lenders Act do not apply to Non-Banking Financial Companies (NBFCs) registered under the Reserve Bank of India (RBI) Act.
11. Reserve Bank of India v. Jayantilal N. Mistry: This case established the principle that banks can be held liable for negligence and breach of duty of care towards their customers.
12. Directorate of Enforcement v. Axis Bank Ltd.: This case involved allegations of money laundering and violation of FEMA regulations by Axis Bank. It highlights the strict regulatory framework for banks and financial institutions under FEMA.
13. Union of India v. Ramesh Gelli: This case involved allegations of money laundering and violation of FEMA regulations by a high-profile businessman. The Supreme Court held that the Prevention of Money Laundering Act (PMLA) provisions can be applied retrospectively.
14. Adjudicating Authority (PMLA) v. Bhushan Power and Steel Ltd.: This case established that the PMLA can be used against corporate entities for money laundering offenses committed by individuals associated with them.
15. Deputy Director v. Punjab National Bank: This case involved allegations of violation of FEMA regulations by PNB. The Appellate Tribunal held that FEMA regulations take precedence over any conflicting provisions of the Companies Act, 1956.
16. Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd.: This landmark case held that the RBI’s regulatory powers extend to non-banking financial companies (NBFCs).
17. Bank of India v. K. Mohandas and Ors.: This case involved a dispute over the liability of banks in cases where they have issued bank guarantees. The Supreme Court held that banks cannot be held liable if they act in good faith and have taken reasonable care in issuing bank guarantees.
18. Directorate of Enforcement v. Vijay Mallya: This high-profile case involved allegations of money laundering and violation of FEMA regulations by the former chairman of Kingfisher Airlines. The case highlights the role of the Enforcement Directorate in investigating and prosecuting financial crimes.
19. Sahara India Real Estate Corp. Ltd. and Ors. v. Securities and Exchange Board of India: This case involved allegations of fraud and violation of securities regulations by Sahara India. The Supreme Court held that SEBI has wide-ranging powers to regulate and oversee the securities market.
20. Shree Ram Mills Ltd. v. U.O.I. and Ors.: This case involved a challenge to the constitutional validity of the Sick Industrial Companies (Special Provisions) Act, 1985. The Supreme Court upheld the validity of the Act and emphasized the need for timely resolution of financial distress in the corporate sector.
21. Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. (1987): In this case, the Supreme Court held that the Reserve Bank of India has the power to regulate non-banking financial companies under the Reserve Bank of India Act, 1934.
22. ICICI Bank Ltd. v. Prakash Kaur (1998): In this case, the Supreme Court held that a borrower cannot raise a plea of usury (charging of exorbitant interest rates) against a bank, as banks are not covered under the Usurious Loans Act, 1918.
23. United Bank of India v. Naresh Kumar & Ors. (2014): In this case, the Supreme Court held that banks have the power to initiate insolvency proceedings against their borrowers under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
24. Swiss Ribbons Pvt. Ltd. & Anr. v. Union of India & Ors. (2019): In this case, the Supreme Court upheld the constitutionality of the Insolvency and Bankruptcy Code, 2016 and held that the code provides for a comprehensive framework for the resolution of distressed assets and stressed companies.
25. K. Sashidhar v. Indian Overseas Bank & Anr. (2021): In this case, the Supreme Court held that banks cannot arbitrarily freeze the accounts of their customers without notice and an opportunity to be heard, as it would violate the customer’s right to property and due process.