Page 20 - Banking Finance May 2024

LEGAL UPDATE

Legal

Pass reasoned orders for The RBI's circular calls for banks/finan- In January, Kumar was appointed act-
cial institutions to submit data on wilful ing chief justice of the Karnataka high
declaring wilful defaulter defaulters on a quarterly basis, which is court, but soon became the chief justice

The Bombay High Court has said banks also communicated to the Securities and of the court. With a career spanning
and financial institutions should pass Exchange Board of India (SEBI). over 34 years, Kumar started in 1990
reasoned orders before declaring an According to the plea, in July 2022, the and gradually became an additional
entity or person a wilful defaulter un- Union Bank issued show cause notice to judge in Karnataka High Court in 2015.
der the Reserve Bank of India's Mas- the IFIN and Patel saying it had formed
ter Circular. He has served as the standing counsel
a prima facie view that they deserved in the Central Bureau of Investigation
A division bench of Justices B P to be declared as wilful defaulters. (CBI), and senior standing counsel for
Colabawalla and Somasekhar BSNL, Union Public Service Commission
Sundaresan, in its order on March 4, Govt appoints 2 to securi- (UPSC), University Grants Commission
noted that wilful defaulters are ostra- (UGC), All India Counsel for Technical
cized from access to the financial sec- ties appellate tribunal Education (AICTE), and National Coun-
tor and hence, the discretion given to The Centre appointed retired justice PS sel for Teacher Education (NCTE).
banks under the circular should be ex- Dinesh Kumar as the presiding officer
ercised with caution as mandated by of the Securities Appellate Tribunal for Securities Appellate Tribunal is a statu-
the RBI. four years. Kumar was the chief justice tory body established under the provi-
"Banks and financial institutions that of the Karnataka high court. Justice sions of Section 15K of the Securities
and Exchange Board of India Act, 1992.
seek to invoke the Master Circular to Dheeraj Bhatnagar, retired principal
declare occurrence of wilful default, chief commissioner of income tax, has SAT hears and disposes of appeals
must share the reasoned orders passed been appointed technical member, said against orders passed by Sebi, Insur-
by its Identification Committee and a gazette notification by the ministry ance Regulatory and Development
Review Committee," the HC said. of finance. Authority of India (IRDAI) and Pension
Fund Regulatory and Development
The bench was hearing a petition filed SAT comprises a presiding officer who Authority (PFRDA).
by Milind Patel, former joint managing will be a retired judge and two mem-
director of IL&FS Financial Services bers - one judicial and one technical. "SAT will now function at its full sanc-
Limited (IFIN), challenging an order The presiding officer's position was tioned strength. This will reduce the pen-
passed by the Union Bank of India in vacant for over three months after jus- dency of cases that increased due to the
February 2023 declaring the firm and tice Tarun Agarwala retired in Decem- post of the Judicial Member being va-
its promoters wilful defaulters under ber 2023. Justice Meera Swarup was cant for a period of almost 3 months."
the 2015 Master Circular issued by the the only technical member on the said Amarpal Singh Dua, an indepen-
RBI. bench after justice Agarwala retired. dent securities law practitioner.

18 | 2024 | MAY | BANKING FINANCE