PMC Bank Scam: SC Stays HC Order On HDIL Assets Sale

The Supreme Court has stayed the Bombay High Court’s order on the sale of the bankrupt Housing Development and Infrastructure Ltd (HDIL) as a measure to enable repayment of dues to depositors of the crisis-hit Punjab & Maharashtra Co-operative (PMC) Bank.

The Reserve Bank of India (RBI) had moved the Supreme Court in an appeal challenging the Bombay High Court’s order.

A Supreme Court bench headed by Chief Justice of India S A Bobde, comprising Justice B R Gavai and Justice Surya Kant, issued notice on the RBI's plea to parties concerned, including Sarosh Damania, who had originally moved the Bombay High Court seeking a resolution to ensure payment of dues to PMC Bank depositors.

According to the RBI, the PMC Bank had manipulated its core banking system to shield nearly 44 problematic loan accounts, which includes HDIL. Very few staff members had access to these accounts.

The Enforcement Directorate (ED) and the Economic Offences Wing (EOW) of the Mumbai police had registered offences against HDIL promoters and senior PMC Bank officials.

The Bombay High Court had constituted a three-member committee to evaluate and then formalize the sale of encumbered assets of HDIL. Through this channel, the Bombay High Court was expected to expeditiously recover dues, which were payable by HDIL to the PMC Bank.

In September 2019, the RBI discovered that the PMC Bank had allegedly created fictitious accounts to mask loans to the tune of Rs 4,355 crore approved for HDIL.

A PIL was filed in the Bombay High Court by Sarosh Damania, urging it to pass directions for expeditious disposal of HDIL assets and properties, which were attached by various investigating agencies. The PIL contended the sale of these assets would help repay PMC Bank’s depositors at the earliest.

Recently, the Supreme Court had also stayed a Bombay High Court order connected with the shifting of the two main accused in the PNB Bank scam, from Arthur Road jail to their residence to enable them to sell their assets, which was expected to pay off PMC Bank’s depositors.

The Enforcement Directorate rushed to the Supreme Court challenging the relief granted to PMC Bank scam accused and HDIL directors.

The Bombay High Court had ordered setting up of a three-member committee to conduct evaluation and sale of encumbered assets of HDIL to recover the dues, which the firm is supposed to pay to the crisis-hit PMC Bank.

The Bombay High Court had allowed the HDIL's father-son promoter duo, Rakesh Wadhwan and Sarang Wadhawan, to shift to their resident from jail under the supervision of two jail guards and to ensure their co-operation with investigating agencies.