Non-Compliance with RBI Circular While Considering OTS Proposal: Rajasthan HC stays Direction to Deposit ₹7 Crore for Fresh Consideration

A perusal of the submission indicated that, under order dated 31.08.2024, the appellant, Tijaria Polypipes Limited has already deposited ₹7 crores to the bank for consideration of his OTS proposal in pursuant to circular of Reserve Bank of India dated 08.06.2023, as per direction of a Single Judge in writ petition No.14081/2024.

Again, the appellant has deposited ₹5 crores to the Bank in pursuant to order dated 03.12.2024 while disposing of same writ petition for fresh consideration of his proposal in accordance with the RBI Circular dated 08.06.2023, by a higher authority.

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It was submitted that on two occasions, under the direction of a single judge, the appellant deposited 12 crores, but the bank has not complied and considered the proposal strictly under the RBI circular dated 08.06.2023. Despite a deposit of 12 crores, the OTS proposal was rejected on two occasions without compliance with orders passed by the court.

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Aggrieved appellant petitioner has filed another before the Court while disposing the matter on 05.05.2025 another Co-ordinate Bench has directed a further deposit of 27crores within three weeks for fresh consideration of OTS proposal of the appellant. The Union of India is in favour of "ease of doing business" policy but herein despite direction by a single judge on two occasions, the proposal for OTS was not considered strictly in accordance with RBI circular dated 08.06.2023, therefore, the instant appeal (writ) requires consideration by the Court.

A notice dated 19.05.2023 is placed on record to show that again, the Assistant General Manager (AGM), Jaipur Main Branch, has directed the appellant to deposit a demand draft of ₹7crores as a precondition to consider a fresh OTS proposal.

The main grievance of the appellant is that the OTS proposal was not considered in accordance with circular of RBI, which is the regulatory central bank, and its circulars have a binding effect in regulating banking business in the country. The Bank officials are public servants and duty-bound to act in accordance with law, following principle of accountability and transparency.

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A division bench of Justice Ashok Kumar Jain and Justice Mukesh Rajpurohit held that “the direction in impugned order dated 05.05.2025 to further deposit of 27 crores (in addition to 12 crores, already deposited) shall remain stayed till further orders but respondent No.3 is directed to consider the proposal of OTijaria Polypipes Limited TS strictly in accordance with impugned order dated 05.05.2025 and circular dated 08.06.2023 issued by the Reserve Bank of India. In the meanwhile, no coercive steps be taken against appellant petitioner.”

Further held that the already deposited amount of 12 crores shall be considered as a deposit against OTS, if the same is accepted by respondent No.2. The respondent shall ensure that the matter is brought to the notice of CMD of the Bank.

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