Nationalised Banks Insensitive, Lackadaisical Attitude Putting Public Money At Grave Risk: Bombay High Court Pulls Up Bank Of India

A division bench of Justice K. R. Shriram and Justice Kamal Khata refused to condone a delay of 579 days in filing a commercial appeal against a November 2020 order.

“... the staff / officers of public sector banks/Nationalized Banks and public undertakings are insensitive about the fact that they are working for the public and dealing with public money. Their lackadaisical attitude puts the public money at grave risk and consequently the economy of the country. Whilst applicant (a Nationalized Bank) expects the Courts to protect the interest of the public, they continue to be lackadaisical and negligent and have taken the Courts for granted, which in our opinion, is required to be stopped”.

The court noted that the higher authorities of BOI did not take any action against the staff for neglecting the matter

“The errant staff and officers need to be pulled up and made accountable. It is high time that the public sector banks / Nationalized Banks should take things seriously and be made conscious of the fact that their negligence causes a great deal of loss to the public," the court said.

BOI in its application for condonation claimed that its advocate did not file the appeal because he was suffering from cancer and got bedridden. The bank claimed that it came to know this only in August 2022 and then engaged a new advocate.

Advocate O. A. Das for Bank of India submitted that it should not be punished due to the mistake of its advocate. He also said that even he was unwell for some time and this was part of the reason for delay.

The court was not convinced by the reasons given by BOI. The court said that it is a nationalised bank and has a team of people for legal matters as well as technology to communicate with people through phone, emails, SMS, WhatsApp etc.

The court further noted that no steps taken by the BOI to follow up with the previous advocate were given in the application. BOI also did not explain how it suddenly came to know in August 2022. Not only that, despite the delay, BOI took more than a month to engage a new lawyer in September 2022, the court observed.

The court said that BOI did not act in a bonafide manner and treated the master casually. It should have been more careful dealing with public money being a public sector bank, said the court.

The court referred to State of Bank of India v. Javed Textiles and Ors wherein Bombay HC had observed that property of public institutions belong to the society and not to any individual a group. Precisely for this reason, it appears that no particular individual is interested in safeguarding it, the court had remarked.

It is necessary for courts to step up and change according to the times, said the court.

"It is now exceedingly onerous and difficult to retrieve money lent if there is considerable delay in proceeding against the defaulters. It is therefore imperative for the institutions to take strict action against all concerned and penalize them in such a manner that they would desist from causing any loss to the public money," it added.

The court did not see any benefit in awarding cost or penalising the responsible officers of BOI.

"... mere granting of costs or penalizing the officers responsible, would not suffice as considerable time having passed, the concerned officers may not be either available on account of transfer, superannuation etc. and if they have passed, we do not propose to penalize the family," it added.

The court refused to condone the delay on account of insincere efforts made by BOI and hence dismissed the appeal.

Case no. – Interim Application No. 30326 of 2022 In Commercial Appeal From Order (L) No. 27216 of 2022

Case title – Bank of India v. Magnifico Minerals Private Limited and Anr.

Citation: 2022 LiveLaw (Bom) 526