High Court (India)

May 28, 2019

Trial Proceedings Against Top Former Punjab National Bank Officials Stayed By The Delhi High Court

[ By Bobby Anthony ]


The Delhi High Court has stayed the trial court proceedings against its former Managing Director and Chief Executive Officer Usha Ananthasubramanian and 11 other senior Punjab National Bank (PNB) officials.

Trial proceedings were related to the multi-crore banking fraud involving absconders like Nirav Modi and Mehul Choksi.

The Reserve Bank of India (RBI) had filed a complaint against PNB, its MD and CEO and other officials, including former executive director R S Sangapure and former general manager Rakesh Kumar, for alleged violation of Section 46 of the Banking Regulation Act, in the Court of Metropolitan Magistrate.

Accordingly, the Metropolitan Magistrate had summoned the senior PNB officials on May 24.

However, the Delhi High Court had stayed the proceedings of the trial court and listed the next hearing on the matter on July 17, based on a petition filed by the Punjab National Bank.

According to a Delhi High Court order, the counsel for the second complainant was unable to explain why a general reference was made in the complaint leading to similar general mention in the summoning order under Section 46 of the Banking Regulation Act, 1949, without any specific penal clause indicated.

The Delhi High Court had also directed the RBI to file its response within two weeks.

Earlier, on March 26, the Metropolitan Magistrate of the Patiala House Court had issued summons against 11 PNB officials for furnishing false statements and misleading the RBI, which led to a fraud of more than Rs 13,000 crore, at the PNB’s Brady House Branch in Mumbai.

As per the RBI counsel’s submissions, during information technology systems related inspections, it was revealed that the core banking system was not integrated with several critical applications, and there was no online integration of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network, with the core banking system.

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