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Case Law Details

Case Name : Union of India Vs Citi Bank, N. A. (Supreme Court of India)
Appeal Number : Civil Appeal No. 9337 of 2010
Date of Judgement/Order : 24/08/2022
Related Assessment Year :
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Union of India Vs Citi Bank, N.A. (Supreme Court)

It is a settled proposition of law that when the proceedings are required to be initiated within a particular period provided under the Statute, the same are required to be initiated within the said period. However, where no such period has been provided in the Statute, the authorities are required to initiate the said proceeding within a reasonable period. No doubt that what would be a reasonable period would depend upon the facts and circumstances of each case.

Banking Companies (Period of Preservation of Records) Rules, 1985 require every Banking Company to preserve records stated in Rule 2 for five years and eight years for records mentioned in Rule 3 respectively. No doubt that under Rule 4 of the said Rules, the RBI, having regard to the factors specified in sub­section (1) of Section 35­A, by an order in writing, is empowered to direct any banking company to preserve any of the books, accounts or other documents, etc. for a period longer than the period specified under the said Rules.

Undisputedly, no such order has been placed on record which required the respondents­ Banks to preserve records concerning the transactions in question for a period longer than eight years.

It could thus be seen that even under the said Rules, the Banks are required to preserve the record for five years and eight years respectively. On this ground also, permitting the show cause notices and the proceedings continued thereunder of the transactions which have taken place much prior to eight years would be unfair and unreasonable.

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