Parekh told to withdraw plea on MMCB case

The Gujarat High Court on Wednesday asked Ketan Parikh, an accused in the Madhavpura Mercantile Co-operative Bank Ltd (MMCB) case, to withdraw his petition seeking a change in the term and condition to pay back the Rs 380 crore dues to the bank.

A special court will hear the criminal application filed by the bank against Parekh and the next hearing is scheduled for December 3. Parekh had sought the high court's permission for a revision on the payback terms.

A lower court had granted him conditional bail on the condition that he will pay back Rs 380 crore to the bank in three years.

The three-year period ended on August 23, 2004, after which the MMCB counsel filed an application in the special court in the city, seeking the arrest of Parekh.

Parekh's advocate had also filed a petition, seeking continuance of bail to him and that he was willing to pay Rs 65 crore to the bank.

"The Gujarat High Court has asked Parekh to withdraw his application, seeking a change in the terms of repayment of dues. The hearing in the special court will continue and the next hearing is scheduled for December 3," MMCB chief executive officer B K R Maruthy said on Wednesday.

He added that MMCB will not agree to the proposal, where Parekh has told the court that he is willing to pay back Rs 65 crore.

The Reserve Bank of India had suspended MMCB from the clearing house in March 2001, after a preliminary inquiry revealed that the bank was facing a liquidity crunch and was in the eye of the pay order scam involving Ketan Parekh. Parekh, who is expected to pay back Rs 380 crore to the bank, has so far paid back only Rs 22 crore.

The crisis-hit MMCB had received a fresh lease of life, with the Central government extending the time frame of its revival package by one year. The earlier package period was scheduled to expire on August 24, 2004.

With its recovery of dues not too impressive and with several banks having deposited over Rs 250 crore with it as part of the revival package, MMCB faced the danger of being shut down.