Delhi HC quashes case against Kuber Finance officials

NEW DELHI: The Delhi High Court has quashed a criminal case, lodged by the Reserve Bank of India (RBI), against three former Board of Directors of Kuber Auto General Finance and Leasing Ltd company for violating RBI norms and carrying out business as a non-banking financial company in 1998.

Justice S Muralidhar today quashed the order passed by a Metropolitan Magistrate summoning three former Directors to appear before the court for recording evidence in a complaint case filed by the RBI alleging that the Directors were responsible for violation of norms.

The Court has accepted the submissions made by the Directors - R S Rathore, D G Ramaiah, S S Karnik - that they remained associated with the company only for a short period and had nothing to do with its financial matters.

As per the RBI inspection report, the names of the accused persons did not appear in the report beside the report was also silent about the managing of the affairs of the company, the court said.

"They were merely executive directors not entrusted with any function of the day-to-day management of the affairs of the company..." the Court said in an order.

It was alleged that in 1997, the company had filed an application with RBI to operate as a non-banking financial institution following which RBI wanted to inspect the account books of the company.

The RBI was not allowed to inspect the books by the then Board of Directors but in a surprise inspection the RBI found that the company had classified some of the sub-standard loans and advances as standard assets by violating the RBI rules, the complainant bank contended.