The HC bench comprising Justice SC Dharmadhikari and Justice RI Chagla refused to grant any relief to the PMC Bank depositors. The bench observed that the customers too were partially at fault. At the same time, the court made it clear that the customers could approach competent courts and prove the breach of their contract with the PMC Bank.
Reacting to the December 5 Bombay High Court order rejecting the writ petitions filed by several depositors of the PMC Bank, an aggrieved customer Bernard Pereira registered his strong disapproval of the same. He stated that the contention of the court partly blaming the customers for their fate was incorrect. Maintaining that their reason for depositing money in the PMC Bank was not the extra rate of interest, he opined that it was owing to the bank's long working hours and the best customer service.
The customer remarked, “The Honourable High Court of Bombay has just passed a judgment rejecting all the writ petitions filed in the PMC Bank case against the Reserve Bank of India. The High Court mentions that the depositors are partly at fault for saving their money in a co-operative bank for about a percent extra (interest).
"We, as depositors, do not subscribe to this theory because the reason why we invested in PMC Bank is because they had the best customer service among all banks in the country. In the days when banking customer services meant standing for an hour in the queue for the nationalised bank, here you had a bank which was open 7 days a week, had longer banking hours and had the best customer service which actually makes it a good take over for any other bank to build on its goodwill,” he added.
Paragraph 48 of the judgment states, “We do not think that the petitioners, styling themselves aggrieved investors and depositors, can complain. They have been candid enough to state before this court that they entered into a contractual relationship with the P&MC Bank because that was offering higher interest on the deposits. Attracted by that, this bank was approached by the investors. If later on the affairs of such a bank are not carried on smoothly and efficiently, but contrary to the interest of these depositors and investors, we do not think that they can blame the regulatory mechanism. They are partially to be blamed.”
In the same paragraph, it is mentioned, “The customer is not expected to be so vigilant in all cases so as to note beforehand any wrongdoings in the bank with which he has contractual dealings. Therefore, the investors and depositors can still approach the competent courts and initiate proceedings so as to allege and prove the breach of this contract, trust, and faith by the P&MC Bank. They can, based on the allegations and proof tendered, obtain all the permissible reliefs. If the intervention of the RBI has caused any hardship or difficulty to these investors and depositors, then, needless to clarify that in such proceedings, even the RBI can be impleaded as a party defendant.”
Mentioning that no one had refused to help them in the last 90 days, the depositor claimed that they had received only assurances. Moreover, he alleged that the RBI had failed to play the role of a watchdog. Inferring that the HC had cast aspersions on the co-operative banks, he called upon everyone to withdraw money from all the co-operative banks till the resolution of the issue.
He opined, “However when the honourable High Court says it is our fault, this is what we inferred in the past 90 days when we have 19 deaths so far. The Union government in Delhi looks the other way. The state government has only given assurances. The RBI has not really been a watchdog, it has not been watching and the honourable High Court says it is we who are at fault. All we can infer is that the Honourable High Court means that every citizen of India should not deposit in co-operative banks because they are not safe. We should remove every single rupee from a co-operative bank until these things are set right. Let the RBI, state, Central government first resolve this crisis. Till then, let’s all withdraw every single rupee from co-operative banks. Better safe than sorry.”
The police registered a First Information Report (FIR) against the top officials of the PMC Bank and the promoters of the Housing Development and Infrastructure Limited (HDIL). According to the prosecution, the bank continued giving loans to the debt-ridden HDIL from 2008 to 2019 despite the previous loans not being repaid. This caused a loss of nearly Rs.4,355 crore. After weeks-long protests from the PMC Bank depositors, the RBI increased the withdrawal limit to Rs.50,000.