MUMBAI, November 11: The Bombay High Court has ordered the Reserve Bank of India to initiate immediate inspection of the Times Bank owned by the Bennett and Coleman Limited.

Chief Justice M B Shah pronounced the ruling in the wake of a petition filed by Mumbai Mazdoor Sabha, a trade union of the organisation's employees, represented by advocate J P Cama. The petitioner had said company chairman and Times Bank director Ashok Kumar Jain should be removed from his position, and the RBI should inspect the bank's affairs as per the Banking Regulations Act.

The sabha alleged that Jain had committed FERA (Foreign Exchange Regulations Act) violations in March 1997. When the Enforcement Directorate conducted a raid on Bank of Rajasthan director Keshav Bangur, documents showing havala payment of Rs four crore to Jain were seized. Jain's residence was also raided after that.

The directorate had refused Jain permission to travel out of India, but Jain allegedly used his influence with the then Prime Minister to proceed abroad on medical grounds.

However, the foreign exchange he obtained at the same time was for business reasons. The directorate had also opposed his application for anticipatory bail in the Delhi Sessions Court.

The union recounted a series of allegations against Jain, including FERA violations in Swiss Bank accounts and investments in Mauritian companies.

The RBI, represented by advocate D Y Chandrachud, filed an affidavit today stating that the annual inspection of Times Bank is due in the next three months. The court directed them to complete the inspection by December.

Meanwhile, RBI informed the court that Jain had already resigned from the post on June 2, 1997. The apex bank argued that they would only conduct an annual inspection, and there would be no full-fledged inquiry, since the irregularities have not yet been proved.

Times Bank counsel S C Dharmadhikari argued that the union has made baseless and personal allegations against Jain, and that the Sabha does not even have sufficient employee support in the bank.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.