Bank of baroda

BANK OF BARODA
devolution of underwriting liability. The Bank declined the liability on the ground that since the issue was declared
oversubscribed by the Registrars to the issue no liability can devolve on the Bank under its underwriting commitment.
SEBI had issued an enquiry notice dated July 20, 1995 to the Bank, but closed the matter, vide letter dated June
17, 1996, without imposing any penalty on the Bank. Pursuant to a complaint filed on behalf of MS Shoes, FIR No.
415 of 2000 dated October 1, 2000 was registered by Vikaspuri Police Station under sections 406 and 420 of the
Indian Penal Code against SBI Capital Markets Limited, the Bank, its principal officers including the then CMD, and
others, alleging cheating and breach of trust. In the complaint it has been submitted that the accused fraudulently
and illegally induced MS Shoes to bring cheques from its associates and acquaintances so as to close the issue
within four days, thereby representing to the public that the issue had been subscribed in full within the first four
days. On this basis, the issue was represented to have been more than 90% subscribed and was closed by the
accused. It is further submitted that the subscription having fallen down to about 40% within 30 days of the closure
of the public issue, the underwriters were called to subscribe for the same in proportion, but many of the underwriters
including the Bank did not obtain subscription as per the agreed underwriting amount. The High Court, New Delhi,
by order dated December 11, 2000 in Criminal Writ No. 1221 of 2000 and Criminal Writ No. 1219 of 2000, ordered
transfer of FIR No. 415 of 2000 to the Central Bureau of Investigation (CBI) and the same has been registered with
the CBI, New Delhi as Crime No. RC.SIA-2001-E-0002 dated March 9, 2001. The investigation by the CBI is still
pending.
Civil Cases
1.
M/s. M.M. Plastofibres Private Limited and M/s. Mangalam Polysacks Private Limited (a group company of M/s. M.M.
Plastofibres Pvt. Ltd.) have filed separate suits (Special Civil Suit No. 840 of 2002 and Special Civil Suit No. 839
of 2002 respectively) on October 21, 2002 before the Civil Judge (Sr. Div.), Baroda against the Bank for recovering
damages to the tune of Rs. 54,973,000 and Rs. 74,474,000 respectively and for declaration and injunction restraining
the Bank from carrying out any action in regard to properties given to it as security at the time of sanctioning
various credit limits. The plaintiffs have also filed applications for interim injunction restraining the Bank from taking
any action with regard to the properties given to the Bank as security. The plaintiffs have submitted that they have
suffered huge losses as the Bank had illegally delayed the disbursement of loan sanctioned for the expansion
project being undertaken by the plaintiffs. . The plaintiffs have also submitted that owing to the non-disbursal by the
Bank, they have been unable to service their existing credit facilities and have been unable to pay their electricity
bills. The Bank has disputed these allegations and has submitted that the suits have been filed with the ulterior
motive of preventing the Bank from enforcing the security granted to the Bank. The Bank has submitted that
amounts of Rs. 19,117,004 and Rs. 8,347,179 are payable by M/s. Mangalam Polysacks Private Limited and M/s.
M.M. Plastofibres Private Limited respectively to the Bank under the facilities granted to them. The Bank has filed
applications (O.A.No. 399 of 2002 and O.A.No. 400 of 2002) before the DRT, Ahmedabad for recovery of dues from
M/s. Mangalam Polysacks Private Limited and M/s. M.M. Plastofibres Private Limited respectively. The plaintiffs
have filed applications in civil suits praying for an injunction restraining the Bank from proceeding further in the
action before the DRT, Ahmedabad. The Bank has filed a reply to the said applications for injunction and the civil
suits are pending for framing of issues. The Bank has also served notices dated March 4, 2005 to M/s. Mangalam
Polysacks Private Limited and M/s. M.M. Plastofibres Private Limited under section 13(2) of Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the execution of which has been
stayed by the orders of the High Court, Ahmedabad dated August 8, 2005 in Special Civil Application No.10022 of
2005 with Special Civil Application No. 10023 of 2005.
2.
M/s. Micro Precision Pump & Gears Limited has filed a suit (Special Civil Suit No. 336/1991) on May 9, 1991 before
the Civil Judge (Sr. Div.), Baroda against the Bank for damages to the tune of Rs. 74,083,000 The plaintiff has
submitted that due to non-disbursal of the sanctioned working capital facilities by the Bank, the plaintiff has suffered
huge losses. The Bank has denied the allegations of the plaintiff and has submitted that the Bank could not extend
working capital limits on a regular basis as the plaintiff had failed to create