ICICI Bank fined for ‘misusing’ judicial process

The bank’s counsel,Rajendra Singh Negi,had moved an application before Lucknow district legal services authority on July 7 stating that 835 cases under Section 138 of the Negotiable Instruments Act,which were pending in the court of Additional Chief Judical Magistrate,should be disposed of in the Lok Adalat.

During the hearing,the court found that the bank had moved identical applications in all the 835 cases,saying that the cases were lodged when the respondents’ cheques were dishonoured but now that the petitioner had received the payment,it did not want to pursue the matter.

In his order,the ACJM said that the laws were made for public welfare,not for furthering somebody’s corporate or commercial interests. It was for this reason that,under the Negotiable Instruments Act,the court fee was just Rs 1.50,irrespective of the amount involved. The court said that the transactions involved in all cases of ICICI Bank were business transactions for which the bank should have taken recourse to remedies available under the civil law,but it used the Negotiable Instruments Act and paid a court fee of just Rs 1.5 in each case. The court also said that post-dated cheques taken by the bank cannot be treated as security without completing the legal formalities.

The ACJM said that,in its application,the bank had not informed the court how and when these matters were settled; the bank had hidden facts from the court and misused the judicial process for its business interests.