2010 (8) TMI 1191 - SC - Indian Laws

Summary

The Supreme Court considered an appeal by the Reserve Bank of India against an order issued by a learned Single Judge in a bail application under Section 439 of the Code of Criminal Procedure. The order directed a cooperative bank to release deposits of less than Rs. 10,000 to depositors as and when funds were received. The background of the case involved an application for bail by accused individuals in a criminal case, which was granted by a Magistrate and challenged by depositors before the High Court. The High Court did not cancel the bail but issued a consequential order on 20th December 2002, directing the bank to release funds to depositors with smaller deposits.The Reserve Bank of India challenged this order, arguing that it exceeded the scope of a bail application and contravened provisions of the Banking Regulation Act, 1949. The respondents were served, but only the accused respondent who had been granted bail appeared before the Court, stating that his bail had been confirmed and he had no further comments.The Court held that the High Court's directions went beyond the scope of a bail application and could have far-reaching consequences on the banking system nationwide. It emphasized that the High Court should have confined its orders to matters relevant to the bail application. The Court acknowledged the Reserve Bank of India's concerns and allowed the appeal, setting aside the orders dated 20th December 2002 and 7th February 2003.In conclusion, the Supreme Court ruled in favor of the Reserve Bank of India, holding that the High Court's directions in the bail application exceeded their jurisdiction and could impact banks across the country. The Court set aside the orders issued by the High Court in this matter.