Free Press Journal

Publicity interest litigants should be heard, too

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Nirav Modi

Three judges of the apex court reportedly questioned  Dhanda this week about his temerity to ask attorney general K K Venugopal why he objected to the filing of a PIL seeking an SIT probe for the deportation of Modi. Dhanda’s aged father came and stood behind him after the judges remarked the PIL was a publicity interest litigation.

The right to publicity is intrinsic to individuals and by that logic, to those who file Public Interest Litigations (PILs) because public opinion is the handmaiden of justice. Hence, the Supreme Court should really have no objection to news reports about a PIL seeking the extradition of high-flying scamster Nirav Modi, which was filed by an advocate, Vineet Dhanda.

Three judges of the apex court reportedly questioned  Dhanda this week about his temerity to ask attorney general K K Venugopal why he objected to the filing of a PIL seeking an SIT probe for the deportation of Modi. Dhanda’s aged father came and stood behind him after the judges remarked the PIL was a publicity interest litigation. The bench comprised CJI Dipak Misra, A M Khanwilkar and Dhananjaya Chandrachud.


Objecting to the filing of the PIL, attorney-general K K Venugopal told the court that FIRs had been lodged and a probe was on which made the judges adjourn the petition to March 16 to allow the attorney-general to explain why he had opposed this PIL. The judges did not want to intervene.

A tense atmosphere gripped the court because Dhanda kept insisting on a notice being issued to the Centre. When Dhanda said “the rich were escaping with their money and small men were being hounded to death for small sums,” CJI Dipak Misra said the court did not want to hear speeches. Justice Dhananjaya Chandrachud said: ”the way you are arguing, we think it is a publicity interest litigation.” To this, Dhanda retorted, “what publicity? Lordship is insulting me. I have been practicing in this court for 16 years.”

But Justice Chandrachud reiterated it was a publicity interest litigation and the apex court would have to give enough time to the government to investigate. “If the government does not do that, then we can intervene. All these PILs just play to the gallery,” retorted Chandrachud…

The PIL also sought a direction to the finance ministry and the RBI to frame guidelines to grant loans of Rs 10 crores and above to ensure that such loans could be recovered within a time frame. If not, the properties of such defaulters could be attached and auctioned, this PIL has argued. These points appear to be cogent – publicity notwithstanding.

Dhanda has also asked that bank employees be made liable for sanctioning loans on the basis of incomplete documents. What is revolutionary is that the PIL seeks the attachment of personal properties of bank officials who sanction such loans even after they retire. There is no law in India to permit this because the board of directors of the nationalised banks are collectively responsible for sanctioning loans running into several crores.

But these banks’ individual directors can never be made personally responsible for such bad loans being sanctioned which clog the Debt Recovery Tribunals (DRTs) throughout India. And finally a one-time settlement is signed in the DRTs where only a part of the loan amount is recovered. The Banking Regulation Act, 1949 was amended in 1965 to bring cooperative banks within its purview and permit the Reserve Bank of India to licence, regulate and supervise all banks. But here too, the principle of collective responsibility extinguishes personal liability of directors.

Dhanda’s PIL is well-timed because the negligence of the RBI inspectors who regularly conduct an audit of the nationalised banks cannot be ruled out in the case of the Rs 11,300 crore scam of the Punjab National Bank. Gitanjali Gems Ltd has flouted the Foreign Exchange Management Act with impunity while its managing director Mehul Choksi forged Letters of Undertaking and passed off laboratory-produced diamonds as A-grade gems.

This is why the Supreme Court’s supercilious reaction towards advocate-petitioner Vineet Dhanda appears misplaced because the role of the PNB’s internal auditors is suspicious. The RBI has a statutory duty to monitor the banks’ Nostro accounts which handle foreign currency transactions and was used by Nirav Modi to skim the PNB of Rs 11,300 crore.

RBI auditors (called “inspectors”) have a duty to inquire if companies like Gitanjali Gems Ltd handed over to the PNB statements about deposits received by it. It is almost certain that the RBI inspectors and the internal auditors of the PNB did not do this. Strangely, the RBI put out a press note denying it had directed PNB to honour its commitments to other banks under the Letter of Undertaking (LoU) which was used to garner funds from foreign banks.

This press note dated February 16, 2018 displayed by RBI chief general manager Jose J Kattoor on its official website leads to an inference that it is not accountable for defects in the working of all nationalised banks. “The PNB fraud is a case of operational risk arising on account of delinquent behaviour by one or more employees of the bank and failure of internal controls. RBI has already undertaken a supervisory assessment of control systems in PNB and will take appropriate supervisory action.” Phew ! What is the RBI trying to say?

Shorn of high-sounding words, the RBI is saying it was the job of the PNB’s internal auditors to detect the fraud and it is not responsible. Then, God help the Indian banking industry.

The writer holds a PhD in media law and is a practising journalist-cum-lawyer of the Bombay high court.