IMPORTANT POINT
Section 35A of the Banking Regulation Act does not empower banks to request the transfer of investigations to the CBI, as this would violate the provisions of the DSPE Act.

ORDER :

(M. Nagaprasanna, J.)

The petitioner/Union Bank of India is knocking at the doors of this Court seeking a direction by issuance of a writ in the nature of mandamus directing respondents 1 to 3/the State and its wings to transfer and entrust the investigation in Crime No.118 of 2024 registered for offences punishable under Sections 149, 409, 420, 467, 468 and 471 of the IPC to the 5th respondent/Central Bureau of Investigation (‘CBI’ for short).

2. The facts, in brief, germane are as follows:-

This petition is preferred by the Union Bank of India, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The backdrop to the filing of the present petition is that the 6th respondent/Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (‘the Corporation’ for short), a Government of Karnataka undertaking had held its Savings Bank (‘SB’) account in a branch of Union Bank of India at Vasanthnagar, Bangalore. 6th respondent represented by its Managing Director and the Accounts Officer are said to have instructed the Bank to transfer the said SB account into M.G. Road Branch of the Bank. Considering the request of the 6th respondent, the petitioner/Bank is said to have transferred the SB account to M.G. Road Branch. Upon transfer, respondent No.6 is said to have subscribed signatures for banking business on the specimen signature card and has authorized the Managing Director and the Accounts officer to operate the SB account independently. Certain transactions took place. Money belonged to the Corporation is sent to various accounts, both in the State of Karnataka and in Tamilnadu. The money to the tune of Rs.94,73,08,500/-was distributed to various accounts by the Branch on the basis of forged documents including authorization letter by one Shivakumar, Junior Accounts Officer of the 6th respondent. Based upon the said incident a crime comes to be registered by the State Government in Crime No.118 of 2024 for the aforesaid offences.

3. Parallelly, against the officials of the Bank, the petitioner placed the matter before the CBI, as the alleged fraud involved was beyond Rs.50/-crores. The CBI registers FIR in No.RC0782024E001 for offences punishable under Sections 120-B, 409, 420, 467, 468 of the IPC r/w 13(2) and 31(1)(a) of the Prevention of Corruption Act, 1988 (‘PC Act’ for short). Both the State Government and the CBI independently investigate. The horizon of investigation differs, as the offences under the PC Act as also under the IPC were alleged in the crime registered by the CBI, but the State Government has registered the crime for offences under the IPC. On 19-06-2024 during the subsistence of investigation at both the ends, the petitioner submits a request/representation to the Additional Chief Secretary, Home Department, Government of Karnataka referring to the complaint registered by the CBI and the complaint registered by the State and seeking reference of the entire matter to the hands of the CBI to ensure free and fair investigation. Two days thereafter i.e., on 21-06-2024 the subject petition is filed.

4. Heard Sri R. Venkataramani, learned Attorney General of India appearing for the petitioner; Sri B.V.Acharya, learned Special Public Prosecutor appearing for respondents 1 to 4; Sri P.Prasanna Kumar, learned Special Public Prosecutor for respondent No.5 and Prof. Ravi Varma Kumar, learned senior counsel appearing for respondent No.6.

SUBMISSIONS: Petitioner:

5. The learned senior counsel and Attorney General of India Sri R Venkataramani, representing the petitioner/Bank, would urge the following contentions:

(i) According to the learned Attorney General, Section 35A of the Banking Regulation Act, 1949 (‘Act’ for short) confers such powers on the Reserve Bank of India, to give directions from time to time to banking companies regarding affairs of any banking company, if those affairs are prejudicial to the interest of any banking company.