Reserve Bank of India Act, 1934

The Supreme Court examined the corporate insolvency resolution of Dewan Housing Finance Corporation Ltd (DHFL), where Piramal Capital submitted a resolution plan (RP) that allocated recoveries from Section 66 applications to itself. The plan was approved by the Committee of Creditors (CoC) and the National Company Law …

The Supreme Court considered a batch of writ petitions filed by several banks challenging the Reserve Bank of India's directions to disclose confidential information under the Right to Information Act, 2005. The banks argued that the directions conflicted with Section 8 of the RTI Act, the RBI Act and the Banking Regul…

The Labour Enforcement Officer issued a show‑cause notice under Section 7 of the Contract Labour (Regulation and Abolition) Act, 1970, alleging that the Reserve Bank of India’s College of Agricultural Banking had violated the Act. The principal of the college filed an application to quash the proceedings, contending th…

The petitioners, including acid‑attack survivors with facial disfigurements and a blind individual, challenged the mandatory digital KYC/e‑KYC/video‑KYC procedures for being inaccessible and discriminatory. They argued that requirements such as capturing a live photograph and performing a liveness check (e.g., eye‑blin…

The Supreme Court examined the constitutional validity of the Reserve Bank of India's 1987 directions regulating Residuary Non‑Banking Companies (RNBCs) under Sections 45J, 45K(3) and 45L of the RBI Act. The petitioners, a group of finance companies including Peerless, argued that the directions were ultra vires, unrea…

The Government of Andhra Pradesh issued a demand notice under Section 5 of the Andhra Pradesh General Sales Tax Act, 1957 for tax on the turnover of an auction sale of jewellery held on 19‑08‑1987 by Corporation Bank, invoking Explanation IV to Section 2(1)(e) inserted by Act No. 27 of 1996. The Bank challenged the not…

The Reserve Bank of India (RBI) provided canteen facilities for its Class III and IV employees through three arrangements – an Implementation Committee, co‑operative societies and contractors – but had no statutory duty to run these canteens. The Central Government Industrial Tribunal held that 166 canteen workers were…

The Supreme Court examined the constitutional validity of the amendment to Section 2(1)(o) of the SARFAESI Act, which altered the definition of a non‑performing asset (NPA) to allow different regulators to prescribe classification guidelines for their respective creditors. The petitioners argued that this amounted to c…

New Horizon Sugar Mills Ltd and its directors, who had guaranteed a bank loan, defaulted and faced attachment of their properties under the Pondicherry Protection of Interest of Depositors in Financial Establishments Act, 2004. They challenged the validity of that Act and a government order attaching properties, arguin…

The Supreme Court examined civil appeals filed by State Bank of India and other banks challenging the classification of borrowers' accounts as fraudulent under the RBI's 2016 Master Directions on Frauds. Borrowers contended that the directions denied them a hearing before such classification, violating the principles o…

The Association of Leasing and Financial Service Companies challenged the levy of service tax under Section 66 of the Finance Act, 1994 (as amended) on financial leasing, equipment leasing and hire‑purchase services, arguing that Parliament lacked competence under Entry 97 of List I because Article 366(29A) treated suc…

The respondent, Sagar Thomas, a branch manager of Federal Bank, was dismissed after a disciplinary enquiry and challenged the dismissal by filing a writ petition under Article 226 of the Constitution. The High Court held the petition maintainable, deeming the bank a public authority performing a public duty. The bank a…

V.C. Grover obtained an overdraft facility from Bank of India by pledging shares and later requested the bank to sell 500 of those shares to clear part of his overdraft. The bank delayed the sale for several months, during which the share price fell dramatically, causing Grover a loss. He filed a complaint before the N…

The Association for Democratic Reforms and Common Cause filed two interlocutory applications seeking a stay on the sale of electoral bonds under the Electoral Bond Scheme, 2018, alleging that the scheme permits donor anonymity and violates transparency in political funding. The Court examined the scheme’s statutory bas…

The Supreme Court examined the constitutionality of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, which imposes a total ban on prize chit schemes. Petitioners argued that the ban violated the fundamental right to trade under Art.19(1)(g), was discriminatory under Art.14, and exceeded Parliament's l…

The appellant SEPCO, a Chinese corporation, was awarded a large arbitration award in favour of the Indian respondent Power Mech Projects. The High Court, under Section 9 of the Arbitration Act, directed SEPCO to furnish a Rs 30 crore bank guarantee from a "scheduled bank located in India". SEPCO complied by obtaining a…

The Small Scale Industrial Manufactures Association and several other industry groups filed writ petitions under Article 32 seeking a mandamus directing the Union of India, the Ministry of Finance and the Reserve Bank of India (RBI) to grant a total waiver of interest, extend the loan moratorium, provide sector‑wise re…

Indiabulls Housing Finance Ltd (appellant) sought to enforce loan recovery against Deccan Chronicle Holdings Ltd and others under the SARFAESI Act after the original lender, Indiabulls Financial Services Ltd (IBFSL), merged into Indiabulls Housing Finance. The High Court held that SARFAESI could not be invoked because …

The plaintiff, Fateh Bahadur Singh, sued Jang Bahadur (the second respondent) and two non‑tenure‑holders, Kalawati and Mithlesh Kumari, for specific performance of a sale agreement for a plot of land. The lower courts held that the plaintiff was entitled to specific performance, treating the sales to the appellants as …

The appellants borrowed money from the respondent, securing the loan with seven immovable properties. Their loan account was declared a non‑performing asset and the parties’ contract contained an arbitration clause, leading the respondent to initiate arbitration while also issuing notices under Section 13 of the SARFAE…

The petitioners, a group of companies, challenged the constitutional validity of Section 58A of the Companies Act, 1956 and Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975, arguing that the mandatory 10% liquid asset requirement for deposits maturing in a year violated Articles 14 and 19(1)(g) of the Cons…

Corporation Bank advanced an overdraft facility to D.S. Gowda for construction of flats, later securing the debt by an equitable mortgage and charging interest at 16.5% per annum with quarterly rests. The borrower contested the rate as excessive and argued that the RBI circulars and the Mysore Usurious Loans Act barred…

The Supreme Court examined a consumer complaint filed by two trusts on behalf of credit‑card users alleging that banks were charging exorbitant interest rates of 36%‑49% p.a., which the National Consumer Disputes Redressal Commission (NCDRC) had deemed an unfair trade practice and capped at 30% p.a. The Court held that…

The Supreme Court examined whether the Reserve Bank of India (RBI) could, under Section 45K(3) of the Reserve Bank of India Act, issue Paragraph 4A of the 1987 Directions prohibiting residuary non‑banking companies from levying processing or maintenance charges on depositors. Peerless General Finance & Investment Co. L…

The State Bank of Patiala discounted bills of exchange and, when the drawee defaulted, levied a daily overdue charge as compensation. The revenue argued that this charge constituted "interest" under Section 2(7) of the Interest Tax Act, 1974 and was therefore taxable, while the bank contended it was merely compensation…

The Supreme Court examined several civil appeals and a writ petition challenging Section 3(1)(b) of the Maharashtra Rent Control Act, 1999, which exempts premises let to government, banks, public sector undertakings, foreign missions, multinational companies and private/public limited companies with a paid‑up share cap…

The Supreme Court admitted a batch of writ petitions challenging the demonetisation notification of 8 November 2016 and issued interim directions. It examined the legality of the RBI's power to demonetise under the Reserve Bank of India Act and its compatibility with constitutional provisions. The Court considered the …

The Supreme Court examined whether the Reserve Bank of India (RBI) could refuse to disclose information obtained from banks under the Right to Information (RTI) Act on the grounds of fiduciary relationship, economic interest, or commercial confidence. The Court held that RBI does not have a fiduciary relationship with …

Integrated Finance Co. Ltd., a non‑banking financial company, was inspected by the RBI which found multiple violations and issued a circular prohibiting it from accepting deposits. The company, facing profitability problems, proposed a scheme of compromise under Section 391 of the Companies Act to convert deposits into…

The Board of Directors of the District Cooperative Central Bank, Panna was superseded by the Joint Registrar of Co-operative Societies without prior consultation with the Reserve Bank of India, contrary to the second proviso of Section 53(1) of the Madhya Pradesh Co-operative Societies Act, 1960. The Board challenged t…

The Supreme Court of India struck down the Electoral Bond Scheme and related amendments to the Finance Act 2017, which had introduced anonymous financial contributions to political parties. The Court held that the scheme violated the right to information of voters under Article 19(1)(a) of the Constitution, as informat…

The Kerala State Co‑operative Agricultural and Rural Development Bank Ltd. (KSCARDB) claimed a deduction under s.80P(2)(a)(i) of the Income Tax Act for profits earned by providing credit facilities to its member co‑operative societies. The Assessing Officer held that KSCARDB was a "co‑operative bank" within the meaning…

The Supreme Court examined the constitutional validity of the Chit Funds Act, 1982, challenged by various chit fund companies and individuals on the grounds that it infringed their right to carry on business under Article 19(1)(g) and that Parliament lacked legislative competence, alleging the Act dealt with money‑lend…

The petitioners, shroffs who operated as unincorporated firms providing credit and accepting public deposits, challenged the constitutionality of Section 45‑S of the Reserve Bank of India Act (as amended in 1997) which prohibits such entities from accepting deposits. They argued that the provision violated Articles 19(…

PGF Limited, which sold and developed agricultural land and ran joint‑venture schemes, was directed by SEBI to cease collecting money and to refund investors, on the ground that its activities constituted a collective investment scheme (CIS) under Section 11AA of the SEBI Act. PGF challenged the SEBI order and the cons…

The Supreme Court examined whether the Reserve Bank of India's Master Circular on wilful default applies to defaults arising from derivative transactions or is limited to traditional lender‑borrower relationships. Kotak Mahindra Bank had classified Hindustan National Glass and other parties as wilful defaulters for non…

The case concerned whether a Non‑Banking Financial Company (NBFC) could treat the "Provision for NPA" debited to its profit‑and‑loss account, as required by RBI Directions 1998, as income under s.2(24) of the Income Tax Act or claim a deduction under s.36(1)(vii). The Supreme Court held that the RBI Directions are mere…

The Reserve Bank of India introduced a new pension scheme in 1990, replacing the Contributory Provident Fund (CPF) scheme. Regulations 3(3) and 31 fixed a cut‑off date of 1 January 1986, allowing only employees who retired on or after that date (and before 1 November 1990) to opt into the pension scheme by refunding CP…

The appellants, partners of a firm selling lotteries and magazines, floated a scheme promising investors a double return after the enrolment of 14 additional members. The police charged them under the Prize Chits & Money Circulation Scheme (Banning) Act, 1978 (sections 2(c), 3, 4, 5), the Reserve Bank of India Act, 193…

The Supreme Court examined whether Non‑Banking Financial Companies (NBFCs) regulated under Chapter III‑B of the Reserve Bank of India Act, 1934 are also subject to the Kerala Money Lenders Act, 1958 and the Gujarat Money Lenders Act, 2011. The NBFCs argued that the RBI Act, especially after its 1997 amendment, constitu…

Pure Helium India Ltd. won the lowest bid to supply helium gas to ONGC, quoting a composite price of Rs.149 per cubic meter that included a US$4.60 foreign‑exchange component. When the dollar appreciated, Pure Helium claimed compensation for the exchange‑rate difference, and a three‑member arbitral tribunal awarded it …

The petitioners, a charitable society and a trust, challenged the High Denomination Bank Notes (Demonetisation) Act, 1978, claiming that the Act extinguished their property rights in high‑denomination notes without compensation, violated Articles 19(1)(f), 19(1)(g) and 31(2) of the Constitution, imposed unreasonable ti…

The Supreme Court examined petitions seeking to shift investigation of the multi‑state chit‑fund (Ponzi) scam, which defrauded lakhs of depositors of roughly Rs 10,000 crore, from the State Police to the Central Bureau of Investigation (CBI). The scam involved companies operating across West Bengal, Tripura, Assam and …

Andhra Bank, a "new bank" under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, had a scheme (Regulation 26) that treated travel between an officer's residence and office as official, allowing reimbursement. In 1990 the Central Government issued a circular stating such travel should not be c…

The case concerned the discounting and rediscounting of two bills of exchange by UCO Bank, allegedly to provide funds to stock‑broker Harshad Mehta for securities transactions. The Supreme Court examined whether the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 had jurisdiction over…

The case concerned a massive "call money" scam in which Rs 40 crore of National Housing Bank funds were diverted to broker Harshad Mehta’s account through officials of UCO Bank and NHB. The appellants – senior officials of UCO Bank and NHB – were convicted by a Special Court under the Special Court (Trial of Offences R…

The appellant, a managing director of a pharmaceutical firm, sought to execute an international Merchanting Trade Transaction (MTT) for PPE products, but the Reserve Bank of India (RBI) denied permission under Clause 2(iii) of the 2020 MTT Guidelines because the Indian government had banned PPE exports during the COVID…

The Court examined whether co‑operative banks, which are societies registered under State legislation, fall within the Union List entry 45 (banking) or the State List entry 32 (co‑operative societies) for the purposes of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act,…

The case concerned a challenge by 25 Group I officers of the Reserve Bank of India to an Administrative Circular (No. 8, 7 January 1978) and an Office Order (No. 679, 27 April 1978) that introduced a combined seniority list and inter‑group mobility for officers across Groups I, II and III, with retrospective effect fro…

The Supreme Court examined the constitutional validity of Chapter III‑C of the Reserve Bank of India Act, 1934 (Section 45S and Section 58B(5A)) introduced by the Banking Laws (Amendment) Act, 1983, which limit the number of depositors an individual, firm or unincorporated association may accept and prescribe a two‑yea…

The respondents, who were employees of the Reserve Bank of India, resigned in 1988 before the RBI Pension Regulations, 1990 came into force. The Pension Regulations, particularly Regulation 18, state that resignation results in forfeiture of service and disqualification for pension. The High Court held that Regulation …

The Supreme Court considered two appeals involving Bank of India and a private company concerning wage deductions during industrial actions. In the first appeal, employees participated in a four‑hour strike covering crucial banking hours; the Bank had issued a circular stating that participants would forfeit the full d…

The Greater Bombay Co‑operative Bank Ltd. advanced loans to its member company United Yarn Tex Pvt. Ltd. and sought recovery of the dues under the Maharashtra Co‑operative Societies Act, 1960. The High Courts held that, after the establishment of the Debt Recovery Tribunal under the Recovery of Debts Due to Banks and F…

The Reserve Bank of India (RBI) issued a Statement and a Circular in April 2018 directing banks and other regulated entities to cease dealing with persons or entities dealing in virtual currencies (VCs) and to exit existing relationships within three months. The petitioners – a trade association and several cryptocurre…

The petitioners challenged the constitutional validity of the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 (as amended in 2003), arguing that it encroached upon Union legislative competence (entries 43‑45 of List I) and violated Articles 14, 19(1)(g) and 21 of the Constitutio…

The Supreme Court examined whether the Reserve Bank of India's (RBI) communication dated 9 June 1997 to SIDBI was a binding directive under the RBI Act, 1934 and the Banking Regulation Act, 1949, and whether SIDBI was justified in withholding interest on bonds issued by CRB Capital. The Court held that RBI’s directions…

The petitioners, led by Dharani Sugars and Chemicals Ltd., challenged the constitutional validity of the Banking Regulation (Amendment) Act, 2017 which introduced sections 35AA and 35AB, and contended that the RBI circular of 12‑02‑2018 directing banks and NBFCs to resolve stressed assets within six months was ultra vi…

The Supreme Court examined whether the FIR lodged against Sanchaita Investments and its partners disclosed a cognizable offence under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. The firm accepted public deposits at a nominal 12% interest but paid excess interest of up to 48% in cash, prompting th…

The Supreme Court, by a 4:1 majority, upheld the constitutional validity of the Central Government's notification dated 8th November 2016 demonetising all series of Rs.500 and Rs.1,000 bank notes under Section 26(2) of the Reserve Bank of India Act, 1934. The majority held that the word 'any' in Section 26(2) includes …