GANESH BANK KURUNDWAD LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) Leave granted.

(2.) The present appeal is directed against the judgment and order dated 5.4.2006 passed by a Division Bench of the Bombay High Court in Writ Petition No. 337/2006 questioning Notification dated 7th January, 2006 issued by the Government of India, Ministry of Finance imposing a moratorium in respect of the appellant-Ganesh Bank of Kurundwad Ltd. (hereinafter referred to as "Bank") for a period of three months from the date of order upto and inclusive of 6th April, 2006. Amongst others, the said Bank was directed not to grant any loan or advances or incur liability without the permission in writing of the Reserve Bank of India (in short the RBI). Further, withdrawal of sums not exceeding 5,000/- by a Savings Bank or Current Account holder was permitted with a further relaxation of amount not exceeding Rs. 10,000/- or the actual balance whichever is less in the event of certain difficulties such as medical treatment, higher education and obligatory expenses like marriage etc. Challenge was also made to the appointment of two Directors on the Board of Directors of the Bank.

(3.) The background facts in which the writ petitions were filed are essentially as follows: