( 1 ) THIS petition under Article 226 of the Constitution of India has been filed on behalf of the depositors of Diamond Jubilee Cooperative Bank Ltd. , having its administrative office at Salabatpura, Main Road, Surat, [ hereinafter referred to as the Bank] to safeguard their interest. This petition is, therefore, in the nature of public interest litigation.

( 2 ) IT is the grievance of the petitioner that on account of acts of malfeasance and misfeasance of Ex-Directors and Ex-Officers of the Bank in collusion and association with outsiders i. e. loanees/borrowers, the Bank has ultimately gone into liquidation jeopardizing the deposits of thousands of depositors. It is the say of the petitioner that respondents no. 1, 2 and 3 have completely failed to safeguard the interest of the depositors and now after liquidation, respondent no. 4 has failed to discharge its statutory obligation as provided under the provisions of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 [hereinafter referred to as the Act]. Respondent no. 4 i. e. Deposit Insurance and Credit Guarantee Corporation [hereinafter referred to as the Corporation] has been established for the purpose of insurance of deposits and guaranteeing the credit facilities and for other matters connected therewith or incidental thereto under the Act. (1) According to the petitioner, the Bank is a cooperative bank constituted under the Gujarat Cooperative Societies Act, 1961 to carry on the banking business. It is in existence for more than 40 years by now and till recently it was a renowned and prominent bank in the southern area of Gujarat. According to the petitioner, the Bank has more than 85,000 depositors and out of this, 35% of the depositors are senior citizens. It was consistently making profit in the past, but later on due to large-scale frauds committed on it by none else than its former directors and officers in collusion with their associates who are the borrowers of large amounts from the Bank and thereby the Bank has been plunged into deep financial crisis, from which recovery, at present seems difficult. (2) It is the say of the petitioner that the Bank is an insured bank as defined under section 2 (i) of the Act and it has been paying premium to the Corporation. However, when it appeared to the Reserve Bank of India respondent no. 3 that it was necessary to prevent the affairs of the bank being conducted in a manner detrimental to the interest of the depositors, it cancelled the licence issued in favour of the Bank on 19th June, 2004. The Bank was also ordered to be taken into liquidation and Liquidator was appointed on 23rd June, 2004 by the State Registrar of Cooperative Societies. Thereafter, steps to lodge the claim of the Bank vis-a-vis the depositors were taken and this Court by order dated 14th February, 2005 directed the Liquidator to lodge the claim within one week therefrom with the Corporation. The same has been done. As per the requirement of the Act and the regulations, the Chartered Accountants M/s. Rathi Sharda and Associates have been appointed by respondent no. 3 to verify the claim of the Bank. That has been done on 22nd February, 2005. The Chartered Accountants so appointed have verified the claim and have submitted it to the Corporation on 23rd March, 2005. According to the petitioner, despite the fact that period as prescribed under the provisions of section 17 (2) of the Act is already over on 20th April, 2005, the Corporation has not discharged its liability arising under section 16 (1) of the Act by making payment to the depositors in accordance with the provisions of section 17 (1) of the Act. It is, therefore, submitted at the hearing by Mr. Shalin Mehta, learned advocate appearing for the petitioner that even at the interim stage of the proceedings respondent Corporation may be directed to comply with the provisions of sections 16 and 17 of the Act and to make necessary payment to the depositors. (3) I