Liabilty of Financial Institutions to frauds committed and non diligence by the third party.
An Employee in a Bank fradulently sells the property of the Bank to a third person. The third person without due diligence makes the payment and asks the .Bank to hand over the possession of the property? As per the property laws, Corporate laws etc., is it incumbent on the Bank to hand over the possession of the property to the third person? If RBI advises the Bank to honour the transaction made fradulently by an Employee and accepted by third person without due diligence.What is the legal position?
ii) In case of PNB Nirav Modi fraud, a few Employees of the Bank fradulently issue LOU worth thosands of Crores. The Indian Banks in foreign countries honour these LOUs without due diligence, when they knew that LOUs in India are issued for 3 months and they have been issued for 1 year. RBI is reportedly said to have advised Bank to honour these fradulent LOUs. Whether it is incumbent on the Bank to honour all the fradulent documents/ transactions, when it is clear that with due diligence such fraud would have been detected by the Indian Banks located in foreign countries? What is the legal position? If a precedent is created in PNB, then all the financial Institutes would be liable to honour transactions made fradulently?
iii) I am a minority share holder in PNB. If they honour fradulent transactions worth thousands of crores, they are intentionally causing huge losses to the Bank and consequently causing loss to all the shareholders. Can I file a case against Bank for wilfully causing loss by honouring fradulent transactions and claim compensation?
iv) Can any Advocate file my case de bono? more
ii) In case of PNB Nirav Modi fraud, a few Employees of the Bank fradulently issue LOU worth thosands of Crores. The Indian Banks in foreign countries honour these LOUs without due diligence, when they knew that LOUs in India are issued for 3 months and they have been issued for 1 year. RBI is reportedly said to have advised Bank to honour these fradulent LOUs. Whether it is incumbent on the Bank to honour all the fradulent documents/ transactions, when it is clear that with due diligence such fraud would have been detected by the Indian Banks located in foreign countries? What is the legal position? If a precedent is created in PNB, then all the financial Institutes would be liable to honour transactions made fradulently?
iii) I am a minority share holder in PNB. If they honour fradulent transactions worth thousands of crores, they are intentionally causing huge losses to the Bank and consequently causing loss to all the shareholders. Can I file a case against Bank for wilfully causing loss by honouring fradulent transactions and claim compensation?
iv) Can any Advocate file my case de bono? more
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The two cases quoted above have no comparison. In the first case the transaction is a fraudulent one as the purchaser is ought to know that banks don't enter into sale(of properties) agreements without following an elaborate procedure . The bank will refuse to part with the property as the contract is void abinitio as contracts based on frauds are not enforceable. Whereas in the second case it was within the working laid by the bank and the paying banks new that it was in the course of business of the PNB to issue LOCs. Further while accepting the liabilities of third parties bank has to decide between two options before it. (a) to refuse payment and damage it's reputation in the world as a reputed bank and affect it's future business or (b) to accept the liabilities and remain in the market as a reputed bank who accepts its liability gracefully. The PNB & RBI have rightly chosen the later path as a prudent banker and regulator respectively. more
Apr 09
Mr. Patanjali Dhar: Your comparison is wrong. For selling a property, the culprit would have to forge the documents. The sale has to be registered. The sub registrar will flag the irregularity. In PNB case, the bank employees with blessings of their Board of Directors (who in turn have purchased their positions by paying tribute to the political masters) issued LOU which is issued over SWIFT. SWIFT system ensures that no message can be sent without proper authorization. It is unfortunate that the current Board of Directors continue in their position instead of being sacked and sent to Tihar jail. Their story is no different from other PSU where also similar situation prevails. more
Apr 05
Since Decades Political Governments opted the issue of Compensating the Victims in cases of Massive Attacks ; Courts opted ordering repayment to the Victims if the Culprits caught, their Assets, Deposits recovered . BUT, THE GOVERNMENTS FULLY BACKED BY THE POLITICALLY EMPOWERED AUTHORITIES DID NOT THOUGHT in depth and also did not Amend the Laws to carry Justice to the general public whose Savings, Deposits, Finances are getting Looted while some Financial Institutions and Banks even Writing off the Swindled Money/Unpaid Overdues/ NPAs. Criminal Laws ; Company Law ; Corporate Laws ; AND THE LAWS OF HUMAN RIGHTS including the Article 19 Clause [1] need to be Amended at public interest AS WELL AS NATIONAL INTEREST SINCE SECURED ECONOMIC STATURE ONLY KEEP NATION Economically Stable . more
Apr 05
File criminal compliant against the bank employee n the purchaser in the court For cheating Forgery under IPC n Money laundering act also more
Apr 05
