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PETITIONER: DELHI DEVELOPMENT AUTHORITY

       Vs.

RESPONDENT: SKIPPER CONSTRUCTION CO. & ANR.

DATE OF JUDGMENT:       11/02/1997

BENCH: B.P. JEEVAN REDDY, K.S. PARIPOORNAN

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      This order  is  in  continuation  of  the  order  dated January 31, 1977 and the order dated February 7, 1997.      Pursuant  to  the  notice  given  to  Sri  R.C.  Suneja [formerly Chairman  and Managing Director of the New Bank of India], he  has filed a detailed counter setting out several facts  and   circumstances  and   putting  forward   several defences. He also filed a list of all the movable properties held by  him, his wife and his children. The Canara Bank has fled  an  elaborate  response  in  the  matter.  The  Punjab National Bank,  into which  the New  Bank of  India has been merged, has also offered to file their response.      The other  directors of  New Bank  of  India,  to  whom notices were  directed, viz.,  Ms.Tajwar Rehman Sawhney, Sri Sudershal Lal, Sri S.S.Ranade and Sri J.K.Sawhney have filed their explanations.      On the  basis of  information furnished  by the learned counsel for  the Canara  Bank, with  respect  to  the  legal representatives of Late Sri B.R. Ratnakar [formerly Chairman and Managing  Director of  the Canara Bank notices have been issued to his legal representatives in India.      Sri Harish  Salve, learned  counsel appearing  for  the Reserve Bank  of India, stated that during the course of the day [17 February, 1997], the response of the Reserve Bank of India will be filed.      The question  before us is whether, and to what extent, Sri R.C.  Suneja, Ms.Tajwar  Rehman Sawhney,  Sri  Sudershan Lal, Sri  S.S.Ranade  and  Sri  J.K.Sawhney  are  guilty  of deliberate and/or intentional misuse/abuse of their power in the  matter   of  the  New  Bank  of  India  extending  bank guarantees to  and on  behalf of  Skipper group of companies and what  loss, if any, have they caused to the bank on that account. Upon  the answer  to the  said question will depend the liability  of one  or the  other of  the said persons to make good  the loss  caused to  the bank. Any action against them shall also depend upon such answer.      Similarly, the question in the case of Sri B.R.Ratnakar is whether,  and to  what extent, he is guilty of deliberate and/or intentional  misuse/abuse of  his power in the matter of New  Bank of  India extending  bank guarantees  to and to

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behalf of  Skipper group of companies and what loss, if any, has he  caused to  the bank on that account. Upon the answer to the  said question will depend the liability of the legal representatives of  said person to make good the loss caused to the bank.      We  may   also  mention   that  Sri   R.R.Pradhan,  Dr. M.R.Kotdawala, Sri J.P.Awasthi were nominees of Reserve Bank of India on the board of Canara Bank during the period April 24, 19084  to November 10, 1988. Their responsibility in the matter has  also to be determined. Sri D.Seetharamma was the workman Director  on the  board of  this bank from August 1, 1981 to August 17, 1987. Notices to these persons shall also issue calling upon them to show-cause why appropriate action should not  be taken against them in the light of conclusion (e) recorded  by Justice  Saharya Commission [at Page 128 of the Report].      Having regard  to the  nature of  the question involved herein, and  also because  the Reserve  Bank of India is the authority to  regulate and  monitor the  activities  of  the Banks in  the country,  we think  it  appropriate  that  the aforesaid questions  shall be  enquired into  by the Reserve Bank of  India. For  this purpose, e request the Governor of the Reserve  Bank of  India to  nominate two officers of the status of  Deputy Governors  of the Reserve Bank of India to act as  an  Enquiry  Committee.  The  responses/explanations filed by  the several parties in this court, pursuant to the notices issued  by this  court, shall  be forwarded  to  the Reserve Bank  of India  and shall  form part  of the  record before the  Enquiry Committee.  Two copies  of  the  Justice Saharya Commission  Report shall  also be  forwarded to  the Reserve Bank  of India  and it shall form part of the record before the  said Enquiry  Committee. The  said Report of the Commission shall  be treated as a relevant piece of evidence but  not   as  conclusive   evidence  against   the  persons concerned. In other words, while the Enquiry Committee shall be entitled  to take  into consideration  the material, oral and documentary  gathered by  the said  Commission  and  its Report, it shall not treat the same as final and/or binding. It shall  be open  to the persons concerned to show that the said findings  are not  correct and/or  tenable, in  fact or law, and  that the evidence gathered is not relevant against them. The  Enquiry Committee  shall give notices to both the banks, viz.,  Punjab National  Bank [into which the New Bank of India  has since  merged] and  the Canara  Bank,  to  the persons aforementioned and to all such other persons who, in the opinion  of the  Enquiry Committee,  are responsible for any irregularities  in the  matter and send a report to this court determining  the  responsibility  and  the  extent  of responsibility, if  any, of each of the above persons. Those persons, to  whom notices  are given  by this Court but have not already  filed their  response/explanation in this Court as well as those to whom notices may be given by the Enquiry Committee aforesaid,  shall  be  entitled  to  submit  their response/explanations   before    the   Reserve    Bank   of India/Enquiry  Committee.   The  persons  who  have  already appeared in this Court shall appear before the Committee, at Delhi, on  February 20,  1977. No notices be sent to them by the Enquiry  Committee. The  Enquiry Committee shall meet on that day and commence the work.      All  the   properties  standing  in  the  name  of  Sri R.C.Suneja, his  wife and  children as per the list filed by him shall be subject to the orders dated January 31, 1997.      The  Reserve  Bank  of  India  [the  Enquiry  Committee aforesaid] shall  submit their  Report in the matter to this Court as  expeditiously as  possible, not  later than  three

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months. As  and when  the Report is received, the same shall be placed before this court for appropriate orders.      A copy  of this  order shall  be  communicated  to  the Governor, Reserve  Bank of  India by  name today itself. The Governor,  Reserve  Bank  of  India  is  requested  to  take appropriate steps in pursuance of this order.