PNB scam: Delhi HC stays trial court proceedings against Usha Ananthasubramanian, other officials

The Delhi High Court has stayed the trial court proceedings against Punjab National Bank (PNB), its former Managing Director & CEO Usha Ananthasubramanian, and eleven other PNB officials in a case pertaining to an alleged violation of Section 46 of the Banking Regulation Act. .The complaint in the matter was made by the Reserve Bank of India (RBI) against the backdrop of the multi-crore PNB scam that broke in January 2018..In the order passed today, a Single Judge Bench of Justice RK Gauba recorded,.“The counsel for the second respondent (complainant) on being asked was unable to give an explanation as to why a general reference was made in the complaint leading to similar general mention in the summoning order to Section 46 of the Banking Regulation Act, 1949, without the specific penal clause being indicated.” .The Court thus directed the RBI to file its response in the plea and stayed the trial court proceedings in the matter..Metropolitan Magistrate Dharmender Singh had summoned PNB through its current Managing Director & CEO Sunil Mehta, Anathasubramanian, former Executive Director RS Sangapure, former General Managers Rakesh Kumar and Nehal Ahad, and other officials in March 2019..In its complaint to the trial court, RBI had alleged that the accused persons deliberately furnished false and misleading information on PNB’s operating environment for fund transfer through SWIFT and other similar interfaces, which was done with common intention and in connivance with each other..The conduct, RBI claimed, was in violation of Section 46 of Banking Regulation Act and Section 120B of the Indian Penal Code, 1860..RBI stated that it discovered “the falsity of information” provided by the accused persons while scrutinizing PNB’s Brady House Branch in Mumbai, in the aftermath of the PNB scam..It was found that PNB’s Core Banking System was not integrated with many critical applications and that there was no online integration of SWIFT with CBS..The banking regulator, therefore, submitted that the accused persons “willfully made false statements despite being aware of the risks and repercussions of failing to integrate SWIFT with CBS and introducing STP between SWIFT messaging and CBS”..PNB was represented by Senior Advocate Dayan Krishnan with Advocates Nikhil Varshney and Sanjeevini Sheshadari..The matter will be heard next on July 17..Read the order:.Bar & Bench is available on WhatsApp. For real-time updates on stories, click here to subscribe to our WhatsApp.