#Financial Regulation

Gauhati High Court rules that freezing an entire bank account under cyber fraud allegations without individualized scrutiny violates fundamental rights. While upholding investigative needs, the Court directed defreezing of the account, retaining only Rs. 2,22,500 as lien-a precedent for proportionality in financial investigations affecting livelihoods and business operations.

Bombay High Court rules that commodity futures contracts with negative settlement prices are binding under SEBI and MCX regulations, superseding general contract law principles. The judgment reinforces market integrity by validating derivative-specific settlement mechanisms, even when they deviate from traditional sale of goods norms.

The Bombay High Court has affirmed that the Central Registrar of Cooperative Societies can issue an interim order to halt new deposits in a multi-state cooperative society when there is prima facie evidence of fund diversion and financial misconduct. This sets a critical precedent for deposit protection, empowering regulators to act swiftly before final adjudication to safeguard vulnerable members from systemic collapse.

The Calcutta High Court has ruled that the RBI cannot reject an NBFC’s application for voluntary surrender without first giving it a fair chance to meet its Principal Business Criteria, reinforcing that regulatory exit must follow statutory procedure, not administrative fiat. This sets a critical precedent for all NBFCs seeking orderly wind-down without punitive compliance traps.

The Bombay High Court has ruled that a bank cannot declare a borrower fraudulent without considering a timely submitted reply to a show cause notice, even if internal records claim non-receipt. This sets a binding standard for procedural fairness in financial adjudication under RBI guidelines, requiring banks to maintain verifiable proof of non-receipt before invoking punitive measures.

The Punjab & Haryana High Court ruled that chit funds operating without state sanction under the Chit Funds Act, 1982, remain subject to attachment under the Haryana Protection of Depositors Act, 2013. The judgment underscores that regulatory compliance is a prerequisite for statutory exemptions, impacting unregistered financial establishments in Haryana.