Page 23 - Banking Finance July 2021

LEGAL UPDATE

Legal

Cases

Cheque bounce may disposing of cases under the "Therefore, we are of the considered
Negotiable Instrument Act. opinion that these applications are not
remain criminal offence maintainable," the Supreme Court

The Central Government may drop its RBI Duty-Bound To Disclose said, citing its stance in previous cases.
plan to decriminalise cheque bounce Banks' Inspection Reports The 2015 judgment pertains to the
offences after there were requests to release of annual inspection reports
continue the existing system, which Under RTI: Supreme Court and other financial reports of individual

can potentially make people honour The Supreme Court dismissed banks' banks under the RTI Act from the RBI.
their financial commitments due to pleas to "recall" its 2015 judgment that Jayantilal Mistry, an RTI activist, had
fear of prosecution. directed the Reserve Bank of India to opposed the RBI's decision to not share
release their annual inspection reports these reports under the act. At the
It would seek directions from a
Supreme Court panel formed to under the Right To Information Act. time, the Supreme Court had ordered
expedite the pendency of cheque In its 2015 judgment, the Supreme the release of such information in a
bounce cases before taking a final call. Court had said the central bank has a transparent manner, since it is in public
duty to uphold the interest of public at interest.
Last year the Department of Financial
Services (DFS) had proposed large, the depositors, country's In 2019, the banking regulator
decriminalising minor offences, which economy and the banking sector. released a new disclosure policy for
included cheque bouncing, for "This court was of the opinion that the documents that can be accessed
improving business sentiment and RBI has to act with transparency and through RTI requests, which did not
unclogging court processes. not hide information that might include annual inspection reports. The
embarrass the banks and that it is policy was challenged in the Supreme
The DFS had invited comments from Court. Once again, the court asked the
duty-bound to comply with the
stakeholders for the move that was provisions of the act and disclose the RBI to comply with the 2015 ruling.
proposed as a post Covid-19 response information sought," the top court State Bank of India, HDFC Bank Ltd.
strategy to help revive economic said, citing its previous judgment. and a few others then filed a "recall
growth and improve the justice system.
The Justice L Nageswar Rao and Justice petition", stating that they were not
"A lot of stakeholder consultation went given due hearing in the matter. Since
Vineet Saran-headed bench held that
into it, and an overwhelming response banks would be impacted by the
there was no provision in the Supreme
has been received in favour of not release of these reports, they need to
Court rules for a recall of the judgment.
diluting the existing provision," a senior The bench added that parties should be heard, the applicants had argued.
goverment official said. not be allowed to file applications to They also argued that the release of
Last month the Supreme Court has set reopen concluded judgments of the such reports would impede on their
up a committee to suggest was of court. right to privacy.

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