Consider afresh applications seeking money for emergencies: HC to PMC Bank

The court directed PMC bank to decide afresh about the applications of depositors seeking money for the medical and educational emergencies

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The Delhi High Court on Monday directed the administrators of Punjab and Maharashtra Co-operation (PMC) Bank to decide afresh about the applications of depositors seeking money for the medical and educational emergencies.

The court also directed the petitioner to submit the list of depositors before administrators, which included medical and educational emergencies within three weeks.

The Bench of Justice DN Patel and Justice Jyoti Singh said, "We direct the depositors to approach the administrators of PMC Bank giving the need in detail, for which they would require the money. Administrator to decide within two weeks. They would inform the decision through an affidavit."

After these directions, the court slated the matter for February 26.

"We have something in our mind while petition sought issuance of direction to RBI to make a mechanism in this regards," the Bench said.

The direction of the High Court came on Monday during the hearing of an interim application in an ongoing Public Interest Litigation (PIL) by activist Bejon Kumar Mishra through Counsel Shashank Deo Sudhi who was seeking inclusion of all financial emergencies arising out of the necessity from education expenses, marriage expenses and other genuine financial needs.

Meanwhile, the Counsel of RBI objected that existing guidelines does not permit educational emergency.

However, the court directed the petitioner to represent on both emergencies and administrator will decide the same.

Earlier, the Reserve Bank of India while opposing the plea, through an affidavit stated that the withdrawal limit set is based on the present liquidity position of the bank and its ability to pay its depositors. The PMC Bank is not in a position, financially, to pay all its depositors an amount upto Rs 5 lakh at this juncture, owing to constrained liquidity, it said.

However, RBI had also informed the court that the PMC Bank had invited Expression of Interest (Eol) from eligible investors for investment/equity participation for its reconstruction. The last date for submission of Eol was December 15, 2020. The PMC bank has informed RBI that in response to Eol, four proposals have been received. These proposals are being examined by the bank with regard to their viability and feasibility taking into account the best interest of the depositors. To undertake this process, the PMC Bank would need some more time, the RBI reply said.

The RBI's reply had also stated that criminal proceedings are underway against the Promoters of HDIL Group and ex-Chairman of PMC Bank and they are under judicial custody.

The PMC Bank has informed on its part having initiated actions under available legal frameworks under SARFAESI, Arbitration and NCLT proceedings.

The main plea had also sought directions to the PMC Bank, Reserve Bank of India and others to set up a court-monitored SIT for transparent investigation in a time-bound manner. It claimed that the investigation is being dragged, which is resulting in a situation of complete helplessness and uncertainty towards the hard-earned money of innocent depositors.

Claiming that several people have lost their lives under the stressful financial circumstances in the PMC matter, the application also sought directions to appropriately compensate the families of deceased depositors who have lost their lives under the stressful financial situation including direction of releasing the total deposited amount to those families immediately without any further delay.

In September 2019, the RBI had capped the withdrawal limit and restricted the activities of the PMC Bank after an alleged fraud of Rs 4,355 crore came to light.

The Enforcement Directorate had later seized and identified movable and immovable assets worth more than Rs 3,830 crore owned by HDIL in connection with the case.