THE HON’BLE SRI JUSTICE C.V.RAMULU W.P.No.345 of 2004 Dated:10.11.2006 Between Viziainagaram Cooperative Urban Bank Limited, Vizainagaram, rep., by its Secretary, S.Nageswara Rao. …..Petitioner and 1.The Reserve Bank of India, Urban Banking Department Rep., by its Executive Director and another. …Respondents THE HON’BLE SRI JUSTICE C.V.RAMULU W.P.No.345 of 2004 ORDER: This writ petition is filed seeking to declare the proceedings in Ref.VCUB/2003/927 dated 12- 09-2003 issued by the 2nd respondent as arbitrary and illegal and contrary to the directions issued in W.P.No.11593/2002 dated 11-07-2002. It appears that the petitioner-Bank made fixed deposits to a tune of Rs.3,55,00,844/- with the 2nd respondent during the period from July 1999 to August, 2000, which matured during the period from 18-10-2002 to 21-9-2003 and the maturity value of the said deposits is Rs.6,07,57,107/-. The said fixed deposits are made in 8 items, which are as under: Sl FD No. Date of Amount Due Maturity No. deposit Rs. Date value Rs. 1. 102036 9.5.2000 25,00,000 9.5.2000 36,69,617 2. 102037 9.5.2000 25,00,000 9.5.2003 36,69,617 3.053998 27.7.1999 29,38,750 27.8.2003 53,62,631 4.053999 28.7.1999 1,02,92,925 28.8.2003 1,87,82,530 5.063838 2.8.1999 98,86,456 2.9.2003 1,80,40,370 6.063839 21.8.1999 23,88,713 21.9.2003 43,47,870 7.101699 18.10.2000 25,00,000 18.4.2002 34,42,236 8.101698 18.4.2000 18.4.2002 18.4.2002 34,42,236 When the petitioner approached the 2nd respondent bank to pay the fixed deposit amounts before maturity the 2nd respondent rejected to do so. Therefore, the petitioner approached this Court and filed writ petition No.11593 of 2002 and the same was disposed of on 11.7.2002 by recording the undertaking given by the 2nd respondent bank to the effect that it would pay the fixed deposit amounts to the petitioner upon their maturity. Meanwhile, it seems that the affairs of the 2nd respondent bank were not healthy. Therefore, the 1st respondent-Reserve Bank of India issued instructions under Section 35 (A) of the Banking Regulation Act, not to pay any amounts to the depositors except Rs.1,000/-. Hence, the writ petition is filed. A detailed counter-affidavit has been filed by the 2nd respondent stating that if the matured fixed deposits of the petitioner are paid, it may lead to deteriorating the condition of the bank, as the other deposit holders may also demand repayment of their matured fixed deposits. The respondent bank cannot treat the petitioner bank separately. In fact, the respondent bank has submitted a rehabilitation package to the 1st respondent- Reserve Bank of India and awaiting for favourable orders. Learned counsel for the 1st respondent says that in view of the instructions issued under Section 35-A of the Banking Regulation Act, the 2nd respondent-bank cannot pay any amount exceeding Rs.1,000/- to any depositor unless further orders are issued. Further, the petitioner is not an individual depositor to doubt its integrity. The petitioner- Vizainagaram Cooperative Urban Bank Limited represented by its secretary, filed this writ petiton. The petitioner bank collected fixed deposits from its customers and reinvested in the 2nd respondent bank, may be contrary to RBI Guidelines. In view of the above, the 1st respondent- Reserve Bank of India is directed to consider this very writ petition as a representation filed by the petitioner and pass appropriate orders, considering the petitioner’s case for issuance of direction to the 2nd respondent to release the fixed deposits, which were already matured. The 1st respondent shall pass orders within a period of two months from the date of receipt of a copy of this order and communicate the same to the petitioner. Writ petition is disposed of accordingly. No costs. _________ 10-11-2006 rkk