RESERVE BANK OF INDIAversusGM, COOPE. BANK DEPOSIT AJC HR. SHA & ORS.

                    [2010] 9 S.C.R. 1107


                 RESERVE BANK OF INDIA                            A
                               v.
    GM, COOPE. BANK DEPOSIT AJC HR. SHA & ORS.
          (Criminal. Appeal No. 1486 of 2004 )

                      AUGUST 12, 2010
                                                                  B
    [HARJIT SINGH BEDI AND CHANDRAMAULI KR.
                   PRASAD, JJ.]

      Code of Criminal Procedure, 1973:
                                                                  c
       s.439 - Bail granted by Magistrate to Ex-Chairman of a
  Co-operative Bank in a case of misappropriation of the
· amounts deposited in the Bank - Order challenged by
  depositors - High Court though not cancelled the bail, but
  directed the Bank to pay the amounts received by it from        D
  several accused persons to the poor depositors who have
  invested not more than Rs.10,0001- with the Bank - Reserve
  Bank of India challenging the said directions - HELD: Far
  reaching consequences of the directions of the High Court are
  way beyond the scope of an application for bail filed by an     E
  accused uls 439 CrPC and the High Court, as much as
  anyone else, must stay confined to the issues relevant to the
  matter before it - It was thus not open to the High Court to
  pass orders which could affect the working of Banks all over
  the country - The orders dated 20.12.2002 and 7.2.2003
  passed by the High Court set aside ~ Banks/Banking -            F
  Banking. Regulation Act, 1949.

     CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
 No. 1486 of 2003.
                                                                  G
     From the Judgment and order dated 07.02.2003 of the
 High Court of Gujarat at Ahmedabad in Criminal Miscellaneous
 Application No. 284 of 2003.


                             1107                                 H
     1108    StJPREME COURT REPOR'TS                [201 OJ 9 S.C.R.


A                                   WITH

     Crl. A. No. 24 of 2005

         Basava Prabhu S. Patil, Kuldeep S. Parihar, H.S. Parihar,
     Hemantika Wahi, Rajiv Shankar Dvivedi, H.A. Raichura for the
B    appearing parties.

         The following order of the Court .was delivered

                              ORDER

C         1. We have heard learned counsel for the appellant which
     is the Reserve Bank of lndi~ in this case.

          2. The appellant is aggrieved by the order dated 20th of
     December, 2002 whereby a direction has been issued by the
o    learned Single Judge in an application for bail under Section
     439 of the Code of Criminal Procedure made by an accused
     that depositors who had made deposits of less than Rs. 10,000/
     - should have their deposits released as and when funds were
     received by the respondent No. 3 - cooperative bank.
E         3. In this case, an application for bail was made by some
     of the accused in Cr. No. 121 /2002 of Naranpura Police
     Station in respect of an offence alleged to have been committed
     by respondent No. 3, the Ex-Chairman of the Bank, respondent
     No. 4. Bail was granted by the Magistrate vide order dated 22nd
.F   February, 2002. This order was challenged by the depositors
     before the High Court. The High Court, however, did not cancel
     the bail granted to respondent No. 3 but made a consequential
     order on 20/12/2002. This order is reproduced below:-

G               "At this stage, learned counsel Shri Prajapati
         appearing for the depositors rightly made a grievance that
         so far poor depositors are not paid by the bank out of the
         amount, which has been received by the bank. If it is so,
         then it is most unfortunate Mr. Munshaw tried to explain that
H        the said amount is used by paying salary etc. of the bank
 RESERVE BANK OF INDIA v. GM, COOPE. BANK 1109
        DEPOSIT AJC HR. SHA & ORS.

     employees. This amount should not have been used by the           A
      bank authorities for any other purpose except distributing
      the same amongst the poor depositors. Mr. Prajapati for
      the depositors association has pointed out that there are
      more than 75,000 depositors. Out of that, number of
      depositors are poor persons who have invested their life         B ·
      time saving in the bank. He, therefore, requested the court
      that the bank should start paying the amount to the
      depositors who have invested not more than Rs. 10,000/
      - at the first instance. There is lot of substance in what has
      been submitted by Mr. Prajapati for the depositors.              c
      Accordingly, the bank should start distributing the amount,
      which is so far recovered by them from the accused under
      the interim orders of this Court. On the next date of hearing
      the bank shall furnish the details of the money being paid
      to the poor depositors, who have invested not more than
                                                                       0
       Rs. 10,000/- at the first instance. On the next date of
     .hearing, al! the accused as well as 1.0. Al')d Administrator
·-     of the bank shall personally remain present at 2:15 P.M.
       before this Court."

     4. The Reserve Bank of India has challenged the operative         E
portion of this order as being beyond the scope of .an
application under Section 439 of the Code of Criminal
Procedure and as it infringes on several provisions of the
Banking Regulation Act, 1949. It has been urged that these
facets had been pointed out to the learned Single Judge in an          F
application dated 13th January, 2003, which too had been
rejected on 7th February, 2003.

      5. The respondents before us have been served but only
the accused, respondent No. 3, who has already been granted            G
bail is before us. The learned counsel contends that as far as
he is concerned, he has nothing to say in this matter as his bail
has been confirmed.

    6. We are of the opinion that the far reaching
consequences of the directions of the High Court are way               H
    1110    SUPREME COURT REPORTS                  [2010] 9 S.C.R.


A beyond the scope of an application for bail filed by an accused
  under Section 439 of the Code of Criminal Procedure and the
  High Court, as much as anyone else, must stay confined to the
  issues relevant to the matter before it. It was thus not open to
  the High Court to pass orders which could affect the working
B of Banks all over the country. It has been pointed out by Mr.
  Basava Prabhu S. Patil, the learned senior counsel for the
  appellant that it is for this reason that the Reserve Bank of India
  had filed this appeal. We, accordingly, allow this appeal and
  set aside the orders dated 20th December, 2002 and dated
c 7th February, 2003.

    RP.                                            Appeal allowed.