High Court Issues Notice On PIL Alleging Fraudulent Practices By Delhi State Co-Operative Bank

A Division Bench of Acting Chief Justice Vipin Sanghi and Justice Navin Chawla has issued notice on the plea while asking the Registrar of Co-operative Societies to expedite the conclusion of the pending enquiries/ inspections against the cooperative bank without any delay.

"We find this position to be completely unacceptable. We direct respondent No.4 to expedite the conclusion of the pending enquiries/ inspections without any delay. The respondents are directed to file their respective counter affidavits within 3 weeks. The status of the pending enquiries/ inspections should also be disclosed by the respondents."

The petitioner is a an Online Editor at News 24 and states that the petition has been filed for the benefit of 700 employees, thousands of its customers investors and public at large. He stated that the Delhi Co-operative Bank is a leading bank with 51 branches in Delhi/NCR itself.

He has alleged that the bank is involved in corrupt and malpractices and creating assets disproportionate to the income of the Managing Director & President of the Bank. Significantly, a number of complaints, emails and RTIs have been filed by the employees along with the petitioner over the period of time but no actions have been taken against them.

The petitioner has also alleged misappropriation of funds by the Bank of 20 Lakhs by the Bank, illegal investment of bank money in fraudulent companies to create wealth disproportionate income, acceptance of illegal gratification, waiver of loans for relatives and illegal appointment of relatives as part of Board of Directors and Managing Director in the Bank.

He has also alleged that the managing director has been appointed by illegal means, that the managing director was previously Deputy General Manager and later promoted to the position of managing director out of turn within a span of 25 days. He states that three consecutive board meetings were conducted within a span of 25 days subsequent to which she was promoted to the position of Managing director without providing any justification or reasons.

The petitioner also states that he had filed an RTI in relation to this with National Bank for Agriculture and Rural Development to find out is the appointment was made after taking permission from the authority. However, the reply stated that no such permission has been taken for appointment. He states that the reply given by NABARD was unsatisfactory.

In view of the above he has approached Court seeking direction to dissolve the board of directors and appointment of administrator to supervise, manage, control and regulate the functioning and affairs of the bank.

He also sought directions for constitution of a Special Investigation Committee for investigation in the fraudulent practices.