M/s. Overland Investment Ltd. and Vs State of West Bengal and others

@JUDGMENTTAG-ORDER

Bhagabati Prosad Banerjee, J.@mdashThese are the four appeals, one appeal has been preferred by Overland investment Ltd., the second one by Verona Commercial & Investment P. Ltd. and the third one including one by Sri Sankar Gope by Sanchayanai Savings & Investment P. Ltd. all being aggrieved by and dissatisfied with the order dated 21st March, 1996 passed by the learned trial Judge. The writ application was filed by the respondent, State of West Bengal by way of public interest litigation before the learned trial Judge praying for appointment of a Special Officer or Commissioner for the purposes of taking charges and possession of all the assets and moveable and Immovable properties including the Bank Accounts not only standing in the name of the aforesaid Companies but also standing in the name of its Directors, relatives and family members and for certain other orders including the order of attachment and making investigation into the affairs of the said companies and ultimately for framing the scheme for refund/ of the money received from millions of depositors. In the writ application it was stated that the provisions of the Residuary Non-Banking Companies (Reserve Bank) Directions, 1987 issued under the provisions of the Reserve Bank of India Act (hereinafter referred to as the ''Reserve Bank Directions'') were wholly inadequate to meet with the present situation that has been brought about in these cases before the learned trial Judge. It was precisely submitted that the said directions of the Reserve Bank of India did not provide any provision for refund of the de-positors money in case it is found that the said companies were not carrying on business in accordance with the directives of the Reserve Bank of India and in case there had been a case of siphoning of funds deposit made by the depositors. By the said order the learned trial Judge heard the matter at a length principally on the question of preliminary objection raised by the appellants that the State of West Bengal has no locus standi to file the said application by way of public interest litigation. Further, it was alleged that the learned trial Judge heard the matter only for the purpose of consideration of the preliminary point as to the maintainability of the writ application at the instance of the State but also granted an interim order of injunction directing the said companies and the directors who were restrained by way of an order of injunction from transferring, disposing of, alienating, encumbering and/or from dealing within any manner whatsoever, all the assets and properties, moveable and Immovable of the respondents Nos. 2 and 6 and/or giving effect or further effect to any agreement relating to their names or standing in the names of the aforesaid companies, their sub-offices, branches and/or held by their agents and employees For and on behalf of the said companies and their directors. The Directors of the subsidiary and group of companies and sister concerns are restrained from transferring, disposing of, alienating, encumbering and/or dealing with all properties and assets, moveable and immoveabte standing in the name of subsidiary companies or group of companies until further orders or. without leave of the Court. The appellants were also restrained from dealing with, disposing of, transferring, encumbering, alienating in any manner whatsoever the assets and properties, moveable or immovable until further orders of the Court and also the assets and properties, moveable and Immovable standing in the name of their family members, employees, subsidiaries, group of companies and sister concerns were also directed not to dispose of without the leave of the Court.

2. As to the other prayers for appointment of Commissioner or Special Officer for taking charge of the assets and properties the learned trial Judge was of the view that the learned trial Judge will consider and pass order at a later stage.

3. The writ application was filed by the State of West Bengal by way of a public interest litigation for obtaining relief in favour of persons who are economically and socially oppressed and unable to approach the Court for vindication of their fundamental or legal rights complaining against the State action or inaction and also for championing the cause of the numerous small, depositors of the three different residuary non-banking companies.

4. In the writ application, it was alleged that these financial institutions were carrying on business in violation of the directions of the Reserve Bank of India in this behalf, and these companies were misusing and diverting money of small depositors. In the writ application, the problems which were sought to be highlighted by the State, starting-from the period when Sanchaita created a havoc in the society. Starting from the Sanchita''s case upto the latest judgment of the Supreme Court in the case of the second Peerless General Finance and Investment Co. Limited and Another Vs. Reserve Bank of India, , was pleaded with reference to the observations made by the Supreme Court in this behalf. So far as the appellant who are respondent No. 2 Messers Overland Investment Co. Ltd. (referred to as Overland) is concerned, it appears that on the basis of the pleadings and particulars placed before the Court, that the directives of the Reserve Bank of India which was issued by the Reserve Bank of India which was a statutory order of the Reserve Bank of India known as Residuary Non-Banking Companies (Reserve Bank) Directions, 1987 issued under the provisions of the Reserve Bank of India Act (hereinafter referred to as the ''Reserve Bank Directions'') were complied with.

5. Admittedly, it appears to us that for not carrying on the business after complying with the directions of the Reserve Bank, the Reserve Bank of India issued a show cause notice against Overland. Thereafter an order was passed and also an order was passed prohibiting the Overland from receiving any deposit from any depositor or in other words stopping its business and secondly an order was passed by which the Overland had been restrained to deal with and disposing of any of the assets of Overland except for the purpose of repayment to its depositors. There are serious allegations against the management of Overland, but is not necessary for us to consider the same in detail in the facts and circumstances of the case as the scope of the appeal is that this appeal is limited as it is against an order of injunction passed by the learned Judge after rejecting the contention of the appellants that the State had no locus standi to file the public interest litigation. Under such circumstances, it would not be proper on our part to deal with the facts of each case separately and/or to make any adjudication and/or observation with regard thereto keeping in mind that the scope of the appeal is whether in the facts and circumstances of the case the learned Judge was right or wrong in passing the said interim order of injunction after rejecting the contention as to the maintainability of the writ application.

6. So far as the Overland is concerned the Reserve Bank of India has passed not only a prohibitory order under which the Overland has been restrained from receiving any deposit from the depositors but also passed an order fridging all the assets of the Companies except refunding the depositors'' money.

7. So far as Verona is concerned a show cause notice was issued with the prohibitory order restraining the respondents from accepting any deposits and show cause notice was made as to why the business should be stopped. It appears that the said order of the Reserve Bank of India was challenged by filing a writ application whereupon Satya-bfata Sinha, J. passed an order setting aside the prohibitory order and directed the Reserve Bank of India to give Verona an opportunity of being heard and the Police authorities were directed to give inspection of the seized records and documents for the purpose of showing cause.

8. So far as Sanchayini is concerned a prohibitory order was passed but the same, was set aside by Sujit Sinha, J. with a direction to pass a fresh order after giving opportunity of hearing to Sanchayini. It further appears that the Reserve Bank of India had not preferred any appeal in these matters.

9. One thing is common in respect of all the three Companies that none of the Companies were carrying on business strictly in accordance with the directives of the Reserve Bank of India. Under the said directives of the Reserve Bank of India 80% of the deposit had to be kept in the manner indicated in the said directives. Only 20% of the deposit could be invested by the Company on the strength of the resolution of the Board of Directors. Admittedly 80% of the deposit had not been kept in the manner indicated by the Reserve Bank of India.

10. So far as Overland is concerned the amount deposited as deposit liability is Rs.2534.22 lacs as on 31st March, 1993 against the actual liability of Rs. 5789.59 lacs. It further appears that the Directors of Overland belong to the same family members and that they are drawing huge sums by way of salary and allowances. It is stated that there are several moveable and immovable properties of Overland in which the depositors'' money had been utilised and had been invested. But that was not the approved mode of deposit in terms of the directives of the Reserve Bank of India. It also appears that the Overland''s final affidavit before this Division Bench pursuant to the directions by the other Division Bench in which the Overland has suggested that they are not interested in carrying out the business which they have carried on so far and they prayed for three months'' time before this Court for the purpose of returning or refunding the depositors money under the supervision of a Special Officer appointed by this Court and thereafter they will start afresh in accordance with the provisions of the said-directives.

11. So far as Verona and Sanchayini are concerned things are equally alarming and only show cause notices were issued, but no further oraer has been issued by the Reserve Bank of India in this regard. It is also clear that Sanchayini and Verona did not comply with the 1987 directives of the Reserve Bank of India for the purpose of protecting depositors'' interest. On perusal of the said 1987 Reserve Bank of India''s Directives, it would be clear that the Reserve Bank of India had laid down a particular mode of investment and the percentage fixed for making investment according to the directions of the Reserve Bank of India and 20% of the depositors, deposit could have been left at the discretion of the Board of Directors of the Company to invest in a mannerdecided by the Board of Dierectors.

12. The learned Judge had also occasion to observe that the said directives issued by the Reserve Bank of India in 1987 was not foolproof inasmuch as the situation that has arisen in this case there is no effective provision made by the Reserve Bank of India in this bhalf for securing refund of depositors'' money in case of failure to carry on the business violating the directions of the R.B.I.

13. In this case, there is another important aspect of the matter that after the delivery of the judgment of the Supreme Court in Peerless General Finance and Investment Co. Limited and Another Vs. Reserve Bank of India, , which set aside the judgment of this Court, the Supreme Court upheld the validity and/or legality of the said directives of 1987 in which it was laid down that the said dirctives had to be observed. These three Companies were enjoying the interim orders of injuntion from the learned single Judge of this Court which were not vacated and taking advantage of the said interim order, the Reserve Bank of India''s directions were not carried out or followed for several years and that had given rise to the peculiar situation in which there is no doubt or dispute that the depositors'' deposits were unsafe and uncertain.

14. From the facts and circumstances of the case, it would not be wrong on our part if we express our doubt as to whether, these Companies will be able to refund the entire money of the depositors with interest under the scheme in which monies were invested by small depositors.

15. The learned Judge had the occasion to observe that the said directions of the Reserve Bank of India were not adequate and /or foolproof and secondly taking advantage of the interim order of injunction, a situation had been brought about which is contrary to public interest and the interest of the small depositors to allow these Companies to function any longer and on the contrary all their assets should be taken over by a Special Officer for the purpose of refunding the same to the respective depositors under a scheme.

16. In this connection, a prayer was also made by the State Government in the writ application for framing a scheme under which the said money could be refunded by the Special Officer.

17. With regard to the maintainability of the writ application filed by the State by way of a public interest litigation, the State of West Bengal under the Reserve Bank of India''s Act has been conferred with the power u/s 45K of the Act. Save and except the power conferred u/s 45K of the said Act, the State Government has no manner of control in the said affairs. But it appears that in the writ application, the State Government had not considered that aspect of the matter, At the instance of some depositors, a criminal case was started at Barasat and in connection of the criminal case all the papers of Overland had been seized. The question is whether the State Government being a creature of the Constitution can file a writ application. It is no doubt that the State can file a writ application if the State is aggrieved by any order. The Supreme Court, in the case of State of M.P. v. Babulal reported in AIR 1977 SC 1718, held that a writ of certiorari can be issued at the instance of the State Government where the authorities acts illegally and there is an error on the face of the records.

18. The State of West Bengal even assuming had no locus standi in the strict sense of the term to file the writ application, but it is a fact that by filing writ application, the State Government had brought to the notice of this Court a very alarming situation which has been brought about because of non-compliance and/or in violation of the directives of the Reserve Bank of India in this regard in which millions of small depotors who are poor and who are not aware of their legal rights and who may not also be aware of the peculiar situation which was prevailing in which depositors'' interests were not fully protected. It is also well settled principle that any party by sending a letter can invoke the jurisdiction of the Court and that it is the persistent view of the Supreme Court that the locus standi principle has to be liberalised so that the Court may intervene in the matter where the assistance of the judiciary is necessary. The judicial control for the fast expanding maze of bodies affecting the rights of the people should not be put into watertight compartment. The Supreme Court, in the case of Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Others Vs. V.R. Rudani and Others, , held that it should remain flexible to meet the requirements of variable circumstances. Writ jurisdiction has a very wide remedy which must be easily available to reach injustice wherever it is found. Technicalities should not come in the way of granting relief under Arts. 32 and 226 of the Constitution of India. The object of mandamus is to prevent disorder from failure of justice and it should be granted in all cases where the law has established no specific remedy and where injustice there should be one. Writ of mandamus is regarded as one of the highest remedies in the Indian judicial system and it" cannot be said that the State is a stranger in this case.

19. Public interest litigation can be brought to the Court for the purpose of upholding the rights of the people, who are poor and who are under the veil of ingorance of their rights and obligations. Small depositors may not be in a position to know that their deposits were remaining unsafe and in order to protect the interest of these small depositors if the State files a writ application by way of public interest litigation we do not see any reason to reject the petition on the ground that it has no locus standi to do. The several cases decided by the Supreme Court as also by the American Court clearly indicate that the past decade has been a lowering of barriers imposed by the standing requirements Idchallenge such actions. The Courts are moving forwards broodening the standing requirement. The strict iegal interest principle has been abolished by allowing the public interest litigation. Even in the United States, the standing requirement is too somewhat different. In the United States, the standing has been conferred by various decisions of the American Supreme Court also to competitors, consumers and the environmentalists and that the Supreme Court of India by various decisions have in fact and in substance extended the concept of locus standi to such an extent that in case of any illegality or irregularity the Court may intervene even at the instance of the stranger inasmuch as personal or legal interest principle is not required to be satisfied in case where a writ petition is filed to espouse the cause of a larger number of people who are poor and ignorant of their rights and who have no means to reach the Court and where the interest of the people and the Society are involved.

19A. So far as the State of West Bengal is concerned the State of West Bengal is not the authority aggrieved but it is the case where the State Government has filed a public interest litigation for and on behalf of millions of small depositors.

19B. The Supreme Court of India observed in the case of S.P. Gupta Vs. President of India and Others, that the new social and economic rights which was sought to be created in pursuance of the directive principle of State policy essentially require active intervention of the State and other public authorities. Amongst those social and economic rights are freedom from indigencies, ignorance and discrimination as well as the right to a healthy environment to social security and to protection from financial, commercial, Corporate or even Governmental oppression. The recent judgments of the Supreme Court has created a new dimension in the public interest litigation. Any action taken by the Government with a view to giving effect to any one or more of the directive principles would ordinarily, subject to any constitutional or legal inhibitions, or other overriding considerations, qualify for being regarded as, reasonable, while an action which is inconsistent with or runs counter to a Directive principle would make the same unreasonable.

20. In the instant case it is not in dispute that millions of small depositors have deposited all their life savings in these companies and the affairs that have been brought to the notice of the Court is very distressing.

21. It is well-settled principle that legal injury is caused to a person or to determinate class of persons by reason of violation of any constitutional or legal provision or without authority of law or any such legal wrong or injury or illegal burden is threatened and such person or determinate class of persons by reasons of poverty, helplesness or disability or social or economical disadvantaged position are unable to approach the Court for relief any member of the public can maintain an application for an appropriate direction, order or writ in the High Court under Art. 226 and in case of breach of any fundamental right of such persons or determinate class of persons in this Court under Art. 32. This was observed by the Supreme Court in S.P. Gupta Vs. President of India and Others, .

22. Accordingly, we are not inclined to hold that the writ application is not maintainable. When the matter has been brought to the notice of the Court and from the fact if it appears that the right of millions of poor and illiterate poor is required to be safeguarded, it would be in the interest of justice that the Court should consider and take steps accordingly. We are not inclined to give a narrow meaning to the concept of locus standi in public interest case and particularly when the same has been brought to this Court by the State of West Bengal. Under Sections 45K and 45L of the Reserve Bank of India Act, the State has been conferred some power and mat after considering the scope and effect of the Act and the purpose of the Act and considering that in violation of the directions issued by the Reserve Bank of India if results in a situation where millions of depositors may suffer and in a situation where it appears that the Reserve Bank of India is not prompt and has not risen to the occasion and further everything said and done and in spite of observations made by the Supreme Court in several cases that these directions are fool proof and that such an observation is binding upon this Court, but unfortunately we have laboured hard but could not to find out any suitable provision which may be said to be appropriate to meet with the situation that has arisen in the instant case.

23. In our view, any person being an ordinary citizen who cannot have any interest in the matter can file a writ application and in any event there is no reason why the State cannot file a litigation to expo use the cause of the millions of small depositors whose fate are not known. The purpose of the public interest litigation would be frustrated if the State is denied the right to move the Court and to bring to the notice of the Court certain things or certain affairs in which the State had no role to play in view of the constitutional limitations. The State of West Bengal is not enforcing any of its rights but is simply drawing the attention of the Court of certain aspect of the matter, and praying the Court to take appropriate action in the matter. The strict view of the locus standi principle as is adopted by the English Court is unapplicable in our country because of the peculiar situation that is there in our country. Most of the people are not properly educated. They are socially and economically backward and they do not know their rights under the law and they have no means to approach the Court for redressat of their lawful grievances. It is a social action litigation. True, the individual depositors have not cdme to the Court but if materials are brought to the notice of the Court, the Court is concerned about the case that has been brought out to the Court but the Court is not concerned how and who has brought the matter to the Court. This principle is applicable to public interest litigation. Public interest litigation means a litigation in which the interest of the public are involved. Locus standi principle cannot stand in the way of moving this Court by any person or authority not interested into the affairs directly and accordingly, we are unable to hold that the State had no locus standi to move the writ application in the facts and circumstances of this case. Accordingly, we hold that the learned trial Judge has rightly taken the trouble of considering the case laws in order to come to the conclusion that the State had locus standi to move the writ application.

24. The next point that has been raised in this appeal is that the writ petition does not disclose any cause of action. After the writ petition has been filed by a supplementary affidavit containing certain facts have been brought on record and from the records it appears that there were some materials which the Court cannot reject outright. In the writ application reliance was placed to the reports of the Reserve Bank of India as well as the revised audited report. All these things taken together goes to show that the Reserve Bank of India had made several inspections and in all inspections Reserve Bank of India found that these companies were not carrying on the business strictly'' in accordance with the said directives of the Reserve Bank of India,

25. In order to appreciate the power of the Reserve Bank of India in this behalf, it is necessary to look into the provisions of the Residuary Non-Banking Companies (Reserve Bank) Directives of 1987 (hereinafter referred to as the ''Directives''), which was promulgated by the Reserve Bank of India in view of the directives given in view of the observations made by the Supreme Court in the case of Reserve Bank of India Vs. Peerless General Finance and Investment Co. Ltd. and Others, wherein the Supreme Court observed, "We also like to quary what action the Reserve Bank of India and the Union of India are taking or proposing to take against the mushrooming growth of finance and investment companies offering staggeringly high rate of interest to depositors leading us to suspect whether these companies are not speculative vendors floated to attract unwary or credulous investors and capture their savings....."

26. The said directives became operative from May 15, 1987, which was made applicable to every Residuary Non-Banking Companies which receive any deposit scheme in lump sum or in instalment by way of contribution or subscription or by sale of units by certificates etc. Paragraph 6 of the said directives is a heart of directions consisting of three sub-paragraphs with explanations. The marginal note expresses "security for depositors".

27. The sub-paragraph (1) thereof provides that on and from May 15, 1987, every RNBC shall deposit and keep deposit in fixed deposit with public sector banks or invest and keep investment in unencumbered approved securities (such securities being valued at the market value for the time being) or any other investment which in the opinion of the company is safe, a sum which shall not, at the close of the business on December 31, 1987, and thereafter, at the end of each half year, i.e., June 30 and December 31, to pay less than the aggregate amount of liabilities to the depositors whether or not such amounts have become payable.

28. The directions became operative from May 15, 1987. They would apply to every Residuary Non-Banking Company for short ''R.N.B.C.''which receives any deposit scheme in lump sum or in instalment by way of contribution or subscription or by sale of units of certificates or other instruments or "in any other manner" vide Cl. II of the definition. Cl.'' III(a) defines deposits as defined in S. 45(1)(bb) of the Act. Para4 regulates receipt of deposits for a period not less than 12 months and not more than 120 months from the first day of the receipt of the deposit. Paragraph 5 prescribes minimum rate of return of 10 per cent per annum (to be compounded annually) on the amount deposited. The proviso empowers R.N.B.C. at the request of the depositor to make repayment of the deposit, after the expiry of a period of one year from the date of the deposit but before the expiry of the.period the deposit with two per cent reduced rate of interest from 10% interest. Paragraph 6, the heart of the directions consists of three sub-paragraphs with explanations. The marginal note expresses "security for depositors". Sub-paragraph (1) thereof provides that on and from May 15, 1987, every R.N.B.C. shall deposit and keep deposited in fixed deposits with public sector banks or invest and keep invested in unencumbered approved securities (such securities being valued at their market value for the time being), or in other investments, which in the opinion of the company are "safe, a sum which shall not, at the close of business on 31st December, 1987 and thereafter at the end of each half year that is, 30th June and 31st December be less than the aggregate amounts of the liabilties to the depositors whether or not such amounts have become payable. The proviso specifies that the sums so deposited or invested (a) not less than 10 per cent shall be in fixed deposits with any of the public sector banks; (b) not less than 70 per cent shall be in approved securities; and (c) not more than 20 percent or 10 times the net owned funds of the company, whichever amount is less, shall be in other investments. Provided that such investments shall be with the approval of the Board of Directors of the Company. The explanation "Net owned funds" shall mean the aggregate of the paid-up capital and free reserves as appearing in the latest audited balance-sheet of the company as reduced by the amount of accumulated balance of loss, deferred revenue expenditure and other intangible assets, if any, as disclosed in the said balance-sheet. Sub-paragraph (2) enjoin the R.N.B.C. to entrust to one of the public sector banks designated in that behalf,/ deposits and securities referred to in Cls. (a) and (b) of the proviso to sub-paragraph (1) to be held by such designated bank is for the benefit of the depositors. Such securities and deposits shall not be withdrawn By the RNBC or otherwise dealt with, except for repayment to the depositors. Sub-paragraph (3) obligates it to furnish to the R.B.I. within 30 days from the close of business on 31st December, 1987 and thereafter at the end of each half year i.e., as on 30th June and 31st December, a certificate from its auditors, being member of institute of Chartered Accountants, to the effect that the amount deposited in fixed deposits and the investments made are not less than "the aggregate amounts of liabilities to the depositors" as on 30th June and 31st December of that year. Explanation thereto makes explicit what the "aggregate amount of liabilities", "approved securities"; and "public sector banks" "unencumbered approved securities" are meant to be, the details of which are not necessary for the purpose of this case. Paragraph 7 abolishes the power of the RNBC of forfeiture of deposits; paragraph 8 prescribes particulars to be mentioned in the form soliciting deposits; paragraph 9 enjoins issuance of the receipts to the depositors and paragraph 10 obligates to maintain the register with particulars of depositors mentioned therein. Paragraph 11 enjoins its Board of Directors to furnish the information in their report as envisaged therein. Paragraph 12 which is also material for the purpose of this case provides that every RNBC shall disclose as liabilities in its books of accounts and balance-sheets, the total amount of deposits received together with interest, bonus, premium or other advantage, accrued or payable to the depositors. Paragraph 13 enjoins to supply to R.B.I, copies of balance-sheets and accounts together with Directors'' report. Paragraph 14 obligates the company, to submit returns to the R.B.I. in the manner envisaged thereunder. R.N.B.C. has to submit balance-sheet, returns etc. to the department of the Financial Companies as per paragraph 15. Paragraph 16 obligates RNBC to comply with the requirement of the Non-Banking Financial Companies and Miscellaneous Non-Banking Companies" (Advertisement) Rules, 1977 etc. and actual rate of interest etc. to the depositor. Para-graph 17 applies to the prospective RNBC to furnish information in Schedule C. Paragraph 18 accords transitory power and paragraph 19 empowers the RBI, if it considers necessary to avoid any hardship or for any other just and sufficient reasons, to grant extensions of time to comply with or exempt, any company or class of companies, from all or any of the provisions of the directions either generally or for any specified period, subject to such conditions as the RBI may impose and paragraph 20 excludes the applicability of paragraph 19 of the Mon-Banking Financial Companies (Reserve Bank) Directions, 1977.

29. The Supreme Court has considered the validity of and/or legality of the said directives in the Seccond Peerless case reported in Peerless General Finance and Investment Co. Limited and Another Vs. Reserve Bank of India, , and in the context of the provisions of Section 45J, Section 45K and Section 45L of the Reserve Bank of India Act and observed (para 15) :

"A combined reading of the above provisions unmistakably goes to show that the Reserve Bank if considers necessary in the public interest so to do can specify the conditions subject to which any prospectus or advertisement soliciting deposits of money from the public may be issued. It can also give directions to non-banking institutions in respect of any matters relating to or connected with the receipt of deposit including the rates of interest payable on such deposits, and the periods for which deposits may be received. This latter power flows from subsection (3) of S. 45K of the Act. The Bank under this provision can give directions in respect of any matters relating to or con-nected with the receipt of deposit . In our view a very wide power is given to the Reserve Bank of India to issue directions in respect of any matters relating to or corrected with the receipt of deposits. It cannot be considered as a power restricted or limited to receipt of deposits as sought to be argued on behalf of the companies that under this power the Reserve Bank would only be competent" to stipulate that deposits cannot be received beyond a certain limit or that the receipt of deposits may be linked with the capital of the company. Such interpretation would be violating the language of S. 45K(3) which furnishes a wide power to the Reserve Bank to give any directions in respect of any matters relating to or connected with the receipt of deposits. The Reserve Bank under this provision is entitled to give directions with regard to the manner in which the deposits are to be invested and also the manner in which such deposits are to be disclosed in the balance-sheet or books of accounts of the company. The word ''any'' qualifying matters relating to or connected with the receipt of deposits in the above provision is of great significance and in our view the impugned directions of 1987 are fully covered under S. 45K(3) of the Act, which gives power to the Reserve Bank to issue such directions."

30. In this case, the Supreme Court further observed at paragraph 68 that looking from operational pragmatism, the restrictions though apparently appears to be harsh in form, in its systematic working, it would inculcate discipline in the business management, subserve public confidence in the ability of the company to honour the contractual liability and assure due repayment at maturity of the amount deposited together with interest, etc. without any impediment. In other words, the restrictions in paragraph 6 of the directions intended to elongate the twin purposes, viz. habit of thrift among the needy without unduly jeopardising the interest of the employees of the companies and the RNBCs working system itself in addition to safety and due payment of depositor''s money. True, there arises corresponding obligation to pay higher amount of commission to its agents and the commitment should be kept performed and the confidence entrusted in the agents. But it is the lookout of the businessman. The absence of ceiling on the rate of commission would give choice between the company and its agents to a contract in this regard and has freedom to manage its business. The RNBCs are free to incur such expenses and organise their business as they desire including payment of commission as they think expedient. But the subscribers/ depositors'' liability, under no circumstances, would be in jeopardy and the directions were designed to ensure that the interest of the subscribers/depositors is secured at all times, prescribing investment of an equal sum to the total liability to the subscribers/depositors. Paragraph 12 is only a bridge between the depositors and the promise held out and the contract executed in furtherance thereof as a monitoring myocardium to keep the heart in paragraph 6 functioning without any hiatus. It is settled law that regulation includes total prohibition in a given case where the mischief to be remedied warrants total prohibition. Vide Narendra Kumar and Others Vs. The Union of India (UOI) and Others, But the directions do not do that but act as a siphon between the subscriber/depositor and the business itself. Therefore, they are neither palpably arbitrary nor unjust nor unfair. The mechanism evolved in the directions is foolproof, as directed by this Court in first Reserve Bank of India Vs. Peerless General Finance and Investment Co. Ltd. and Others, to secure the interest of the depositors as welt capable to monitor the business management of every RNBC. It also, thereby, protects interest of the employees/field staff/commission agent etc. as on permanent basis overcoming initial convulsions. It was intended, in the best possible manner, to subserve the interest of all without putting any prohibition in the ability of a company to raise the deposit, even in the absence of any adequate paid-up capital or reserve fund or such pre-commitment of the owner, to secure such deposits.

31. In this connection, the Supreme Court also observed at paragraph 42, that:

"We may also observe that the impugned directions of 1987 as well as any other directions issued from time to time by the Reserve Bank relating to economic or financial policy are never so sacrosanct that the same cannot be changed. Even the financial budget for every year depends on the economic and financial policy of the Government existing at the relevant time. So far as the impugned directions are concerned if it is found in future that the same are not workable or working against the public interest, the Reserve Bank is always free to change its policy and scrap or amend the directions and when necessary. We have no doubt that if in times to come the Reserve Bank feels that business of the kind run at present by the Peerless and other companies, in terms of the directions of 1987 are not yielding the result as envisaged by the Reserve Bank, it will always be prepared to consider any new proposals which may be conducive both in the interest of the large multitude of the investors as well as the employees of such companies. Mr. Shanti Bhusan, learned Senior Counsel appearing on behalf of the Reserve Bank made a candid statement on behalf of the Reserve Bank that the Reserve Bank would always be prepared to consider any new proposal which would subserve the public interest."

32. In this connection, the Supreme Court also observed at paragraph 32 that the function of the Court is to see that lawful authority is not abused but not to attain itself the task entrusted to that authority. It is well settled that a public body invested with statutory powers must take care not to exceed or''abuse its power. It must keep within the limits of the authority committed to it. It must act in good faith and it must act reasonably. Gourts are not to interfere with economic-policy which is the function of experts. It is not the function of the Court to sit in judgment over matters of economic policy and it must necessarily be left to the expert bodies. In such matters even experts can seriously and doubtlessly differ. Courts cannot be expected to decide them without even the aid of experts.

33. In this connection, also at paragraph 70, the Supreme Court observed that it is well settled that the Court is not a Tribunal from the crudities and inequities of complicated experimental economic legislation. The discretion in evolving an economic measure, rests with the policy-makers and not with the judiciary. Indian social order is beset with social and economic inequalities and of status, and in our socialist secular democratic Republic, inequality is an anathema to social and economic justice. The Constitution of India charges the State to reduce inequalities and ensure decent standard of life and economic equality. The Act assigns the power to the RBI to regulate monetary system and the experimentation of the economic legislation, can best be left to the executive unless it is found to be unrealistic or manifestly arbitrary. Even if a law is found wanting on trial, it is better that its defects should be demonstrated and removed than that the law should be aborted by judicial fiat. Such an assertion of judicial power deflects responsibilities from those on whom a democratic society ultimately rests. The Court has to see whether the scheme, measure or regulation adopted is relevant or appropriate to the power exercised by the authority. Prejudice to the interest of depositors is a relevant factor. Mismanagement or inability to pay the accrued liabilities are evils sought to be remedied. The directions designed to preserve the right of the depositors and the abilityof R.N.B.C. to pay back the contracted liability. It also intended to prevent mismanagement of the deposits collected from vulnerable social segments who have no knowledge of banking operations or credit system and repose unfounded blind faith on the company with fond hope of its ability to pay back the contracted amount. Thus the directions maintain the thrift for saving and streamline and strengthen the monetary operations of R.N.B.Cs.

34. In the third Reserve Bank of India and others Vs. Peerless General Finance and Investment Company Ltd. and another, the Supreme Court affirmed the view expressed by the Supreme Court in the first and Second Peerless cases and in the third Peerless case a point was raised that the maximum amount of Rs. 10/-that had been prescribed in the proviso to paragraph4A of the said directions was wholly arbitrary and totally inadequate and had no nexus with the need of working expenses, among other points. The Supreme Court in the third Peerless case had observed the question whether the amount of Rs. 10/-that has been prescribed in the proviso to-paragraph 4A was inadequate to meet the cost of brochure and application form and expenses; service charges for the depositors accounts cannot be gone into in the absence of necessary materials in support thereof and it was further observed that the Peerless can make representations to the Reserve Bank of India for the revision of the said amount in the tight of the expenses that would be incurred by it on the brochure/application form and servicing depositors'' accounts and if such representation is made the Reserve Bank of India shall give due consideration to the same and amount prescribed be found inadequate then should revise the same.

35. In this connecfion, the Supreme Court observed a''t paragraph 39, that it cannot be denied that residuary non-banking companies like Peerless, play a useful role in the economy by mobilising savings by tapping that section of the people which the commercial banks are not able to tap. But at the same time, it cannot be ignored that there should be adequate protection for the funds entrusted to them by depositors and for the purpose it is necessary that the working of these companies should be closely monitered and supervised and adequate provisions should be made for enforcement of regulatory provisions that are made for the protection of the interest of the depositors. Since the Bank is required to discharge multifarious functions, it would not be in a position to devote the requisite amount of attention in the matter of monitoring and supervising the functions of these companies. The Union Government may, therefore, consider whether it would be advisable to create a separate instrumentality which may be entrusted with the task of supervision and enforcement of the provisions regulating the functioning of these companies. The Union Government may also consider whether the existing provisions need to be further strengthened so as to give greater protection to. the interests of the depositors. We find that in England the Banking Act, 1987 contains provisions for Deposit Protection Scheme for the protection of the depo-sitors. It may be considered whether provi-sions on similar lines could be introduced here.

36. On perusal of the first, second and the third Peerless cases, it is clear that the said directives are fool-proof and the Reserve Bank of India is the sole authority in this matter and that the Supreme Court has clearly said that the function of the Court is to see that the lawful authority is not abused or not to attend the duties, the task entrusted to that authority. It is well settled that the public body invested with statutory powers must take care not to abuse its power. It must keep within the limits of the authority permitted to it. It must act in good faith and it must act reasonably. Courts are not to interfere with the economic policy which is the function of the experts. It is not the function of the Courts to sit in judgment over matters of economic policy and must necessarily be left to the expert body. In such matters, experts can seriously and doubtlessly differ. Court cannot be expected to decide them without even the aid of experts and the power of the Reserve Bank of India u/s 45K(3) is wide enough and conferred power upon the Reserve Bank of India to take any step in the matter. It is foolproof in case the RNBC follows the Directions.

37. Here is a case where the Reserve Bank of India being a statutory authority and is charged with the duty to safeguard the economic and financial stability bf the country. In M/s. Shri Sitaram Sugar Co. Ltd. and another Vs. Union of India and others, , the Supreme Court held that judicial review is not concerned with the matters of economic policy. The Court does not substitute its judgment for that of the legislature or its agents as to the matters within the province of other. The Court does not supplant ''field of the expert'' by its own views. When legislature acts within the sphere of its authority and delegates power to an agent, it may empower the agents to make findings of facts which are conclusive provided such finding satisfies the test of reasonableness. In such a case, the judicial review is confined to the question whether the findings of fact are reasonable or evidenced and whether such findings are consistent with the law of the land.

38. It is submitted by Mr. Kasi Kanta Moitra learned Counsel appearing on behalf of Overland Investment Company, Mr. Soumen Bose with Mr. S. Pal appearing for Verona and Mr. Biswarup Gupta appearing for Sanchani submitted that the learned trial Judge was wrong in entertaining the writ application in view of the fact that- the provisions of the Reserve Bank of India directives provides a complete code in itself and that is the only appropriate remedy to which the party must refer and the Court should not disturb the function of Reserve Bank of India in this behalf. It is further submitted that the writ Court cannot be converted into a liquidation Court for the purpose of liquidation of the Companies and distribute its assets to its creditors. The learned Counsel also contend that the writ application was mala fide and wa.s filed to subserve the interest of some other party. We are not inclined to accept this contention that the writ application is on the face of it mala fide inasmuch as it has been brought to the notice of the Court that the said Companies were not keeping the money in the manner indicated in the directives and that it also appears that there were serious irregularities and illegalities in the matter of dealing with the monies belong to small depositors.

39. So far as the question of alternative remedy is concerned on scrutiny of the provisions of the Reserve Bank of India Act as well as the said directives it does not appear to us that the Reserve Bank of India has made any provision for framing of the scheme and setting up any machinery for the purpose of refunding of the money belong to the depositors in case it is found that the said Companies have been carrying on business in a clandestine manner and in violation of the directives of the Reserve Bank of India and accordingly, it cannot be said that the said directive is a complete code and the Reserve Bank of India is the only authority to grant relief in such a case. Reserve Bank of India cannot take any step in the matter unless such directives of the Reserve Bank of India are amended and alternative or suitable provisions are made in this behalf. Of course we are suggesting that the Reserve Bank of India should make alternative or suitable provisions to such directives as it is beyond the scope of the power of the Court to issue such direction to change or modify the directives which are issued in exercise of the powers conferred upon the said authority under the provisions of the Reserve Bank of India Act.

40. It is the case of the State of West Bengal that the Reserve Bank of India Act and/or the directions issued by the Reserve Bank of India in this behalf were not wholly adequate to meet with the situation and that the depositors'' interest are not taken care of by the Reserve Bank of India in the absence of adequate provisions made in this behalf. We are unable to agree with this view inasmuch as the Supreme Court had in no uncertain terms stated that the said directions of the Reserve Bank of India are fool-proof and that the Supreme Court further observed that if any difficulty arises any party may approacn the Reserve Bank for the purpose of taking appropriate steps and the Reserve Bank of India is not powerless to issue orders and directions to meet with the exigency. But that observation was made in connection with the carrying out with the business following the directions and not in cases where the deposits were not kept according the direction of R.B.I.

41. In view of the determination made by the Supreme Court in this behalf we are unable to hold that there is no adequate provision in the said directions to protect the interest of the small depositors in the State so long as the RNBC proceeds according the Directives. The Reserve Bank of India has been entrusted by the Parliament under the law to discharge the powers and functions and the Reserve Bank of India had issued directions to control the activities of such financial institutions pursuant to the observations made by the Supreme Court in this behalf.

42. The Supreme Court in the case of N.P. Ponnuswami Vs. Returning Officer, Namakkal Constituency and Others, , had held that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute wholly must be availed of. In this case, the Supreme Court had noted with approval this well settled rule which was laid down by Willes, J. In Wolver-hampton New Water Works Co. v. Hawkes-ford (1859) 6 CB (NS) 336, at p. 356 in the following passage :

"There are three classes of cases in which a liability may be established founded upon statute. One, is where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue either that or the statutory remedy. The second class of cases is, where the statute gives the right to sue merely, but provides no particular form of remedy : there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it..... The remedy provided by the statute must be followed, and it is not competent to the party to pursue the cpurse applicable to cases of the second class. The form given by the statute must be adopted and adhered to."

43. The rule laid down in this passage was approved by the House of Lords in Neville v. London Express Newspaper Ltd. (1919) AC 368 and has been reaffirmed by the Privy Council in Attorney-General of Trinidad and Tobago v. Gordon Grant & Co. (1935) AC 532 and AIR 1940 105 (Privy Council)

44. Considering the provisions of the Reserve Bank of India Act and the directives of the Reserve Bank of India we are unable to hold that the writ petitioner-State or any depositors can get full relief in cases of failure to carry on business in violation of the direction of the Reserve Bank of India. Accordingly, we overruled the contention of the appellants that the writ application should not have been entertained in view of the alternative forum created by the statute. The provisions of the said directives are quite silent and wholly inadequate to meet the alarming situation that has been brought about in such a case. It is further submitted that the three companies were not given any opportunity to file any affidavit-in-opposite to express their view point and according to them they are in a position to liquidate ail the liabilities by selling the assets if some time was given. Investments made in land and properties in contravention of the provisions of the said directives cannot be said to be lawful activity authorised by the statute. If it is found on the face of the balance-sheet or report of the Reserve Bank of India that the monies were not being kept in accordance with the directives of the Reserve Bank of India, in our view, giving the opportunity to file affdiavit-in-opposition by the learned trial Judge could not have improved that situation. For the purpose of giving the opportunity of heating the Division Bench presided over by the learned Chief Justice directed to file affidavit-in-opposition with regard to the view point. Affidavits-in-opposition has been filed in the case of Overland Investment. The Overland Investment Company has stated on affdiavit that they are ready and willing to repay the depositor''s money if some direction is given under the supervision of the Special Officer appointed by the Court of Receiver in this behalf and they want to start a fresh business in accordance with the provisions of the said directives. It is not for this Court to allow the said Companies to carry on business afresh. It is for the Reserve Bank of India to decide.

45. In the instant case it appears that the Reserve Bank has made several inspections and the Reserve Bank''s reports clearly indicate that these companies are carrying on of business in violation of the said directives. Mr. S. Pal who appeared with Mr. Bose submitted that the writ petition is not maintainable as the writ was directed against the three companies. It was not directed against any of the actions of the Reserve Bank of India or any other authorities against whom the writ lies. In our view maintainability of the writ cannot be decided merely on the prayers in the petition. Prayers can be moulded to meet with the particular situation. In the instant case it is the case of the State that the Reserve Bank of India''s directives are wholly inadequate to meet with the situation and that is why intervention of the Court was necessary for grant of relief to the millions of small depositors. In our view the aforesaid financial institutions who are allowed to deal with the public money and working under the control and supervision of the Reserve Bank of India should be regarded as public authorities and they must come within the purview of public law domain. These may be the Companies but the constitution of the companies is not the sole factor. The nature and duties performed by those institutions and the control of governmental agencies are relevant factors. The role played by these financial institutions has been highlighted by the Supreme Court in Peerless''s case and that when these companies were dealing with the public money and the monies belong to millions of small depositors and they are discharging public duty and they are acting under the control and supervision of the Reserve Bank of India particularly under the directives issued by the Reserve Bank of India, which are all statutory and further the control of the Reserve Bank of India is deep and pervasive in respect of these institutions and the view of the Supreme Court in the case of Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Others Vs. V.R. Rudani and Others, and other case laws on this point, we are clearly of the view that these companies even though incorporated under the Companies Act are discharging public duty by dealing with the public monies under the control of Reserve Bank must be regarded as public authority amenable to writ.

46. In this connection reference may be made to the decision in the case of Corporation of the City of Nagpur Vs. The Nagpur Electric Light and Power Company Ltd., , where it was held that even a writ can issue at the instance of a consumer against a Public Utility Concern for its failure to perform its duty under the Electricity Act or to restrain it from abusing its powers under the Act. Following the Bombay decision the Calcutta High Court in the case of Dr. Sudhir Chandra Neogy Vs. Calcutta Tramways Co. Ltd., held that writ would lie if it could be shown that Calcutta Tramways Co. Ltd. a company under the Companies Act, was violating any of the provisions of law for which there was no adequate remedy. Now in Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Others Vs. V.R. Rudani and Others, is the authority for the proposition that the form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. If positive obligation exists mandamus cannot be denied. But such duty must have public character. Mandamus would also lie against a company constituted by a statute for the purpose of fulfilling public responsiblities (see Hals-bury''s Laws of England, 3rd Edition, Vol. II, page 52) Prof. De Smith in his book stated that "to be enforceable by mandamus, a public duty does not necessarily have to be one imposed by statute. It is sufficient for the duty to have been imposed by charter, Common Law, Custom or even contract. It cannot be said that the said Companies are carrying on business with the depositors under a mere contract.

47. Lord Denning in his book "The Closing Chapter" has said "The first thing to notice is that public law is confined to public authorities". What are ''public authorities''? What is the nature of persons and bodies against whom relief may be granted by such orders i.e. by mandamus, prohibition or certiorari? Lord Goddand, C. J. said in R. v. National Joint Council for Dental Technician ex parte Neate ( 1953) 1 QB 704 that "the bodies to which in modern times, the remedies of these prerogative writs have been applied have been all the statutory bodies on whom Parliament has conferred statutory powers and duties which, when exercised may lead to the detriment all subjects who may have to submit to their jurisdiction". In.R. V. Electricity Commission (1924) 1 KB 171 and in O'' Relly v. Mackman (1982) 3 WLR 1096 . It was observed that the persons or bodies who have legal authority to determine question of affecting the common law or statutory rights or obligations of other persons as individuals are public authorities. But these cases are not exhaustive. Public laws are those which enforces the proper performance by public bodies of duties which though owe to the public.

48. In the instant case it is not in dispute that these companies are dealing with public and the public money and they are working under the supervision and control of the Reserve Bank of India under a statutory order and that there is sufficient public element in the affairs of the companies and accordingly it cannot be said that these affairs of these companies are not amenable to writ.

49. In the instant case it also appears to us that criminal case was started against some of the companies and the State knew the affairs of these companies but we do not find any reason why the State waited for a long time in the matter of bringing to the notice of the Court inasmuch as long delay might have caused serious prejudice and loss to the depositors. The State should have come to this Court long back when the State had come to know all the affairs of the company which according to the State was highly prejudicial in public interest.

49A. We are clearly of the view that the Reserve Bank of India failed to discharge its functions in this regard by not taking appropriate actions in time to protect the interest of the depositors. The Reserve Bank of India Directives were declared to be valid by the Supreme Court in the year 1992. The determination made by the Supreme Court whose word is the last and the final, the three companies were aware that after the Supreme Court nobody could alter the said directives and that they were required to act strictly in terms of the said directives. The role of the Reserve Bank of India in this sphere appears to be a mere spectator. True, that the Court should not also venture into an unknown field and should not make any attempt for skiing on a virgin snow whose discretion is unknown and uncertain and further the hazards that may occur is also not known. Accordingly the Court cannot issue any directives to the Reserve Bank of India.

50. It was contended by the learned Counsels appearing on behalf of the three companies that the only remedy in such a case is that the Court has no jurisdiction of power and/or authority in respect of this matter when the Parliament has conferred all the powers to the Reserve Bank of India and the Reserve Bank of India has issued directives. It was submitted that if the directives were not carried out it is for the Reserve Bank of India to take steps and not the Court to take steps-against the erring company. It was submit''ed by Mr. Somendra Chandra Bose, Mr. Kashikanta Moitra and Mr. Biswarup Gupta, learned Counsels appearing on behalf of the three companies, that this Court had no jurisdiction and the remedy provided under these directives was the only remedy which can be availed of and it was submitted that the Court should follow the law and the Court cannot create any law nor the Court can take any action contrary to law. It was submitted that it was for the Parliament to legislate and/ or the Reserve Bank of India to take care of this situation and it was suggested that the Court should keep its hand folded.

51 We are of the view that in the facts and circumstances of the case, the Court is not bound to keep its hand folded and play the role of a mere spectator as has been done by other authorities. The Court has an important role to play.

52. In M.C. Mehta and another Vs. Union of India and others, , the Supreme Court observed that where the law of the past does not fit in the present context, the Court should evolve a new law. In National Textile Workers'' Union and Others Vs. P.R. Ramakrishnan and Others, , the Supreme Court observed that if the law fails to respond to the needs of the changing society, then either it would stifle the growth of the society or choke its progress or if the society is vigorous enough, it will cast away the law which'' stands in the way of its growth. The law must therefore constantly be on the move, adopting itself to the fast changing society and not lag behind. It must shake off the inhibiting legacy of the colonial past and assume a dynamic role in the process of social transformation.

53. In Union of India (UOI) and Another Vs. Raghubir Singh (Dead) by Lrs. Etc., the Supreme Court observed that it is used to be that the Judges make law. Today it is no longer a matter of doubt that substantive volume of law governing the lives of the citizens and regulating the functions of the State flows from the decision of the superior Courts.

54. In such circumstances, Mr. Shakti-nath, Mukherjee, learned counsel appearing on behalf of the respondents/State of West.. Bengal, submitted that the principtes of Judicial activism require the Court should intervene in this matter to protect millions of depositors whose fate had been made un- certain and whose entire life savings will be lost because of inaction and/or failing to appreciate the grave situation that has been arisen by the Reserve Bank of India and that if the Court does not interfere then it would be a case of judicial inactivism.

55. True, every citizen has a fundamental right to carry on business under Article 19(1)(g) Of the Constitution, but in our view there is no fundamental right to carry on a business in violation of a law. Fundamental rights to carry on business only extends to carry on business strictly in accordance with the law, but not in the contravention of the law when there is a law for this. The provisions of Article 19(1)(g) has to be given a purposive meaning and we cannot give an interpretation which would be destructive to the rights of millions of depositors whose fate is at stake. The financial institutions have no fundamental right to carry on trade in whatever manner they like and may siphon off and. misuse the depositors'' money in contravention of the law, still they will be protected by the provisions of Article 19(1)(g) of the Constitution. A person may have a fundamental right to carry on business, but under garb of carrying on business, one cannot take away the fundamental rights or other rights of other persons. The depositors'' right could not be taken away by any. means whatsoever. The Articles of the Constitution must be reasonably interpreted so as to give effect to its true meaning.

56. In our view, the Judges should be active and not passive. The Judges and the judiciary have an important role in law making in the present day society.

57. The Reform of Equity'', in C.J. Hamsori (ed). Law Reform and Law-Making (1953), P. 31, it was observed, ?The truth is that the law is uncertain. It does not cover all the situations that may arise. Time and again practitioners are faced with new situations, where the decision may go either way. No one can tell what the law, is until the Courts decide it. The judges do every day make law, though it is almost heresay to say so. If the truth is recognised then we may hope to escape from the dead hand of the past and consciously mould new principles to meet the needs of the present."

"For him the function of the Judge was to be active in reforming the law -- ''if the law is to develop and not to stagnate, the House must, I think recapture this vital principle --the principle of growth. The House of Lords is more than another Court of law. It acts for the Queen as the fountain of justice in our land''." (From precedent to precedent (1959), p. 34)

58. These two passages have been quoted from the Law Making Process by Michael Zander, Fourth Edition, page 313.

59. James S. C. Reid, in ''The Law and Reasonable Man'', 1968, proceedings of British Academy, 193, 194-5, said, "I suppose that almost every doctrine of the common law was invented by some Judge at some period in history, and when he invented it he thought it was plain common sense -- and indeed it generally was originally. But, with the passage of time, more technically minded Judges have forgotten its origin and developed it in a way that can easily cause injustice. In so far as we appellate Judges can get the thing back on the rails let us do so; if it has gone too far we must pin our hopes on Parliament."

60. Judicial restraint is good, but that does not mean judicial cowardice. In this case, for, want of appropriate provisions in the law and any power conferred upon the Reserve Bank of India on the existing terms and conditions of the directives a dangerous situation has arisen where the fates of the millions of people are at stake. Under such circumstances, the Court must as of necessity should do everything in its power to salvage the millions of depositors and to protect their interest. If the Court have to depend entirely upon the Reserve Bank of India and keep its hands folded, closing its eyes, in that event, the mischief that would be done to the millions of depositors could not be remedied either by the Reserve Bank of India or by the Parliament or by the Court in the long run. We never intended to interfere with the function of the Reserve Bank of India but we are forced to interfere in the interest of millions of depositors whose life savings are frittered away and the RBI''s directions do not contain any provisions for recovery or refund of the depositor''s money.

61. Accordingly, following the traditional path and judicial restraint and accepting the principle of judicial dependency on the administration, for the time being, we direct the Reserve Bank who is stated to be an authority on the subject and an expert of all experts in the field of finance and monetary affairs of this country under the Reserve Bank of India Act, to take appropriate steps according to its wisdom, to protect the interest of the millions of depositors whose fate are at stake, by whatever means the Reserve Bank of India can do under the law, but that does not mean that we are issuing a mandate upon Reserve Bank of India and/or we are intending to interfere with the autonomy that they are enjoying under the enactments and as entrusted by the Parliament. The Court, however, is giving the Reserve Bank of India an opportunity to discharge its power and functions and to do whatever it may do for giving relief to the millions of depositors after holding inspection for: investigation by experts of the Reserve Bank of India into the affairs of the companies and to take whatever decision they can take and to pass any order that they may think fit and proper under the law and if Reserve Bank of India is satisfied that the depositor''s money is lying fully secured in the hands of the companies and these companies coutd be allowed to function strictly under the directions of the Reserve Bank of India following the same faithfully and truly, it may direct the companies to continue their business but if the Reserve Bank of India finds that there are violations of the Directives of the Reserve Bank of India and the depositors'' money are tying unsafe or insercured and these companies cannot be allowed to function any longer, in that event the Reserve Bank of India may take steps by framing the scheme or otherwise in such a manner so that the depositors get their deposits with interest in full. We can only hope that the Reserve Bank of India will look into this matter and give top priority in the matter in the interest of millions of depositors involved in this case and any further delay in this matter will be fatal to the interest of the depositors. The Reserve Bank of India is given time till 31st December, 1996, and for this purpose the Reserve Bank is given liberty to obtain directions from the learned trial Judge about the affairs and submit a report on or before 31st December, 1996, about the action than they have taken and if it transpires to the learned trial Judge that the Reserve Bank of India has taken all steps which fully protected the interest of the depositors in that event the learned trial Judge will pass an appropriate order. In case it is found that the Reserve Bank of India is unable to cope up with the situation and grant relief to the depositors, in.that event after expiry of 31st December, 1996, the learned trial Judge will be at liberty to take further steps in the matter as the learned Judge may think fit and proper and pass necessary orders in this connection. Since the Reserve Bank of India is an expert body they are given time up to 31 st December, 1996 to do whatever the Reserve Bank may do by making inspection and by causing investigation into the affairs of these companies including all their assets to find out what was the total money of the depositors and whether the depositors'' money are safe and these lying invested in any manner which could be recovered. In such a matter, it is expected that the Reserve Bank of India will not show any slackness and/or dilatory procedure. The Police authorities and other authorities who are in possession of all the seized records and documents must give inspection if the Officer of the Reserve Bank of India for this purpose approaches the said authority so that the Reserve Bank of India can discharge its powers and functions under the law. If the Reserve Bank is unable to make sure that each and every depositor is secured and could get back money with interest from these companies who are''under the control and supervision of the Reserve Bank within the period fixed the learned trial Judge will take further steps as required, as the learned trial Judge thinks fit and proper, in the facts and circumstances of this case.

62. Until further orders of the Court the police authorities of various places wherever the properties of the companies are situated shall take steps to protect and preserve these properties keeping in mind that these properties have been purchased by the depositors'' money. To prevent anybody from trying to remove or cause any damage to such properties the State-respondents are directed to issue an instruction to all the Superintendents of police and Officer-in-charge of the respective police stations, where the properties of the companies are situated, to protect, preserve and see that the properties are not destroyed and the value of the same is not dismissed by any stranger or by any interested persons in this regard as the said property has to be preserved in the interest of these depositors.

63. In this connection, it may be mentioned that Overland in the affidavit-in-opposition had clearly stated that they had no objection to refund the depositors'' money in its entirety by appointing a Receiver and Special Officer and that the said company wants to start a new business strictly following the directions of the RBI. Whether or not the company will start a fresh business in accordance with law or not is not for us to comment, but when the said company has come forward with the proposal or affidavit that it intends to refund, in that event, the said party cannot go back from its commitment. The difficulty of this Court is that the Special Officer or the Receiver has to be paid remuneration and that remuneration has to be paid from the depositors''money which this Court does not want to do so at this stage, but directs the RBI to take steps on the basis of such a commitment made by Overland. The depositors'' money have already been reduced. It would not be possible to refund in full. But the Court by appointing Special Officer at the cost of depositors'' money does not want to reduce the depositors'' amount to be refunded to the depositors. If the RBI does not frame any scheme after taking all the assets of these companies by whatever means, the RBI thinks fit and proper and frames a scheme for refund of the money to the depositors, the learned trial Judge should proceed immediately to pass further orders by appointing Special Officer or Receiver or by framing scheme, as the learned trial Judge may think fit and proper.

64. Further we do not find that any alternative means are available under the provisions of the Companies Act inasmuch as it would be merely mockery to expect that each and every depositor who had deposited Rs. 1000/- to Rs. 10000/- would file a winding up petition and the winding up petition would become a mere formality inasmuch as in such a case the company would pay up the money of one depositor and one winding up petition would become ineffective.

65. This process cannot be adopted as this would not give proper and effective remedy. This Court is interested in protecting the interest of the millions of depositors and no other means excepting the means formulated by the learned trial Judge or in the alternative, as per our directions, the Reserve Bank of India may, in its wisdom and discretion, come forward with suitable amendments and/or directions by amending the statutory directions and taking effective steps so as to secure refund of the depositors'' money in full or substantially. Unless this is done, the Court cannot keep its hands folded and cannot play the role of a mere spectator which the other authorities have played so far.

66. Accordingly, we affirm the decision of the learned trial Judge with the modification to the extent indicated above, and we make it clear the interim order of injunction passed by the learned Judge will continue with this modification and the Reserve Bank of India finds it necessary after taking steps in the matter as directed, may mention the matter before the learned Judge for modification or variation of the interim order as the case may be. The Reserve Bank of India shall take steps and do the needful as required under the law irrespective of any other order or direction from any other learned single Judge in this matter. With regard to the prayer for payment of salary etc. of the staff concerned we are unable to pass any order at this stage as it appears to us that the said demand is not within the parameters of the RBI. Direction, Depositors money could not be utilised at this stage for such payments which will be considered by the Reserve Bank of India and/or by the learned trial Judge at a latter stage.

67. Thus the appeals including all the applications are disposed of. There will be no order as to costs.

68. All parties concerned are to act on a signed xerox copy, of the judgment and order on the usual undertaking.

Asok Kumar Chakravarty, J.

69. I agree.

70. Order accordingly.