Patna High Court
Canara Bank Through Its General Manager … vs The Union Of India And Ors on 15 July, 2025
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.10127 of 2017
======================================================
1. Canara Bank Through Its General Manager, Circle Office, Luv Kush Tower,
Exhibition Road, Patna - 800001
2. General Manager, Canara Bank, Circle Office, Luv Kush Tower, Exhibition
Road, Patna- 800 001.
3. Branch Manager, Canara Bank, Gopalganj Branch, Gopalganj.
... ... Petitioner/s
Versus
1. The Union Of India, through Special Director, Eastern Region, Directorate
of Enforcement, CGO Complex, 3rd MSO Building, 6th Floor, DF Block, Salt
Lake, Kolkata - 700064.
2. Special Director, Eastern Region, Directorate of Enforcement, CGO
Complex, 3rd MSO Building, 6th Floor, DF Block, Salt Lake, Kolkata -
700064.
3. The State of Bihar through Secretary, Department of Home, Bihar, Patna.
4. Inspector General of Police, Economic Offences Unit, Bihar, Patna.
5. The State of West Bengal Through Secretary, Department of Home, West
Bengal, Kolkata.
6. Director General of Police, West Bengal, Kolkata.
7. Deputy General Manager, Department of Banking Supervision, Reserve
Bank of India, South Gandhi Maidan, Patna.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr.Rajan Ghoshrave, Advocate
For the Respondent/s : Mr.Md.Nadeem Seraj-Gp5
: Ms. Shalini, AC to GP-5
======================================================
CORAM: HONOURABLE JUSTICE SMT. G. ANUPAMA CHAKRAVARTHY
ORAL JUDGMENT
Date : 15-07-2025
1. The Writ petition is filed to command the
respondent authorities to recall the order dated
04.07.2016
, contained in Letter No. 1220 where
withdrawals from Account No. 2310201010700 held
Patna High Court CWJC No.10127 of 2017 dt.15-07-2025
2/10
in the name of KPC Medical College has been
withheld. Further, to direct the respondent
authorities to accord permission to the petitioner –
Canara Bank to utilize the money, so withheld in the
aforesaid current account, for settlement of the
claims of the persons defrauded by the functionaries
of the said KPC Medical College and Hospital,
Jadavpur. Further, the respondent authorities be
directed to return the money seized from the said
fraudsters, if any, to the petitioner-Canara Bank so
that the same could be adjusted against the
payments already made to the claimants who had
been defrauded.
2. The brief facts culled out of the Writ
petition are that the Petitioner No. 1/Canara Bank,
represented by its General Manager, is a corporate
body constituted under the Banking Companies
(Acquisition and Transfer of Undertakings Act, 1970).
A current account bearing No. 2310201010700 in the
name of KPC Medical College and Hospital, Jadavpur
was opened at Gopalganj branch of the petitioner-
Bank. Thereafter, cheques of different banks issued
Patna High Court CWJC No.10127 of 2017 dt.15-07-2025
3/10
in favour of said KPC Medical College and Hospital,
Jadavpur were credited in the said current account
through clearing. The fraudsters have withdrawn an
amount of Rs. 1.65 crore from the said current
account, out of which three cash withdrawals to a
tune of Rs. 60,25,000/- were made and four RTGS
transactions amounting to Rs. 1,05,00,000/- were
done in the account of one M/s Aastha Constructions
maintained with Central Bank of India, Freser Road
Branch, Patna.
3. An F.I.R. was lodged vide, Case No. 83 of
2014 dated 15.07.2014, on the file of Bidhan Nagar
Police Station (West Bengal) for the offences
punishable u/s 419, 420 and 468 of the Indian Penal
Code for the aforesaid fraud. The Bidhan Nagar
Police Station sought details of the accounts and
CCTV Footage during transaction in the said current
account and a notice u/s 91 of Cr.P.C. was issued to
petitioner No. 3(Branch Manager, Canara Bank) on
24.06.2014. The aforesaid fraud has been reported
by the Gopalganj Branch of the Canara Bank to the
Patna High Court CWJC No.10127 of 2017 dt.15-07-2025
4/10
Recovery Legal and Fraud Prevention Wing, Head
Office, Bangalore on 24.07.2014.
4. An F.I.R. bearing No. 34/2014 was lodged
on 12.09.2014 for the offences punishable u/s 406,
420, 409, 467, 468, 471, 472 & 120-B of the Indian
Penal Code with the Economic Offences Wing, Patna
Bihar which is pending for investigation. The
authorities of the Canara Bank also conducted
investigation and on receipt of the investigation
report, one Baleshwar Prasad Sinha, Senior Manager,
who headed the Gopalganj Branch was placed under
suspension on 01.08.2014 and a disciplinary
proceeding was initiated against the said Senior
Manager which resulted in his dismissal from service
from the bank.
5. Several Writ petitions were filed by
claimants before Hon’ble Calcutta High Court
seeking recovery of their respective money. The
Hon’ble Calcutta High Court while disposing of the
said Writ petitions of the claimants directed the
Reserve Bank of India, to depute a responsible officer
to consider the representations of the petitioners,
Patna High Court CWJC No.10127 of 2017 dt.15-07-2025
5/10
after giving an opportunity of hearing to the
petitioners and the representatives of the Bank, and
to take necessary decisions thereof in accordance
with law and the decision so taken shall be
communicated to the Writ petitioners, as well as to
the Bank. In the light of the order of the Hon’ble
Calcutta High court a meeting was convened at the
office of Reserve Bank of India, Patna on 19.10.2015,
wherein the petitioner-Bank has also participated and
an order was passed by the 7 th respondent on
21.10.2015, which reads as follows:-
“In view of the above, I hold a
view that it may not be proper or desirable
on the part of RBI to direct Canara Bank to
settle the claim of the petitioners or
compensate them straightway. The
fixation of liability for negligence/fraud, if
any, has to be on the basis of a decision of
a court of law or any other competent
authority. As stated earlier, the action
relating to the violation of
circulars/instructions of RBI by Canara
Bank is within the province of RBI. What is
appropriate action to be taken against
Canara Bank is a matter to be examined
by the Central Office of RBI.”
Patna High Court CWJC No.10127 of 2017 dt.15-07-2025
6/10
6. Another Writ petition bearing W.P. No.
23255 of 2015 was filed before the Hon’ble Calcutta
High Court by one Md. Syed Rahmatullah & Others
claiming an amount of Rs. 18,00,000/-. In the order
dated 07.12.2015, the Hon’ble Court has observed
as follows:-
“Prima facie, the order of the
Deputy General Manager (Speaking order
of DGM, RBI, Patna) does not inspire
confidence. It is clear that while opening
the concerned account in the Gopalganj
Branch of the Canara Bank, several
infirmities has crept in and having regard
to detection of want of diligence on part of
officials of Canara Bank leading to such
petitioners being defrauded of their heard
earned money, Canara Bank cannot
escape the liability of compensating such
petitioners on the spacious ground as
mentioned in such order.”
7. Pursuant to it, a meeting was held by
Reserve Bank of India, Mumbai on 05.01.2016 in
which the Chairman-cum-Managing Director of
Patna High Court CWJC No.10127 of 2017 dt.15-07-2025
7/10
Canara Bank had also participated and petitioner
Canara Bank has assured to compensate the
affected persons.
8. Pursuant to the order of the Hon’ble
Calcutta High Court and the decision taken in the
meeting dated 05.01.2016, the petitioner-Bank has
settled the claims of 11 claimants amounting to Rs.
1.68 crore out of 13 claims, by debiting its sundry
account. The Deputy Director, Directorate of
Enforcement, Kolkata on 04.07.2016 issued a letter
bearing No. 1220 and directed the petitioner-Canara
Bank not the permit withdrawal from the said current
account of KPC Medical College and Hospital until
further orders. Being aggrieved by the same, the
present Writ petition is filed.
9. Heard the Learned counsel for the
petitioner as well as the Learned counsel for the
respondents.
10. It is the specific contention of the
Learned counsel for the petitioner that the Bank has
granted loans to KPC Medical College and Hospital
Patna High Court CWJC No.10127 of 2017 dt.15-07-2025
8/10
and recovery has to be made. Withdrawal have been
withheld from the account of KPC Medical College
and Hospital and the petitioner-Bank would suffer
loss if the impugned order remain in effect and
hence, prayed to set aside the impugned order.
11. On perusal of the entire Writ petition, it
is evident that the account holder i.e., KPC Medical
College and Hospital was not made as party to the
Writ petition. The content of the Writ petition also
disclose that one of the Senior Manager of Canara
Bank was in hand and gloves with the fraudsters and
his services were terminated by the bank. It is
evident from the records and the pleadings that
fraud has been committed by KPC Medical College
and Hospital which is under investigation by the
Enforcement Directorate and is also the subject
matter of criminal cases instituted against the
fraudsters.
Patna High Court CWJC No.10127 of 2017 dt.15-07-2025
9/10
12. The bank has no right to settle the
disputes involving the fraudsters. Once the criminal
proceedings are pending before the criminal court.
Though, it is contended by the Learned counsel for
the petitioner that there are specific directions from
the Reserve Bank of India to settle the matters
involving such fraud, the bank is not an adjudicating
authority to settle these matters. Further, the orders
directing the Canara bank to settle the disputes was
not placed before this Court. Further, it is also noted
that the Canara Bank was not a party to the Writ
petitions in which directions were issued by the
Hon’ble Calcutta High Court.
13. Therefore, this Court is of the considered
view that the Bank has no locus standi to file the
present Writ petition for challenging the order of
Directorate Enforcement for withdrawals of the
amounts of KPC Medical College and Hospital. It is
Patna High Court CWJC No.10127 of 2017 dt.15-07-2025
10/10
pertinent to mention that KPC Medical College and
Hospital was not arrayed as party to the Writ
petition. The aggrieved party would be the KPC
Medical College and Hospital to challenge the orders
of Directorate Enforcement as their account
withdrawals were withheld.
14. In view of the above discussion, the Writ
petition is dismissed as it is devoid of merits.
(G. Anupama Chakravarthy, J)
amitkr/-
AFR/NAFR NAFR CAV DATE N/A Uploading Date 29.07.2025 Transmission Date N/A