Authority: Supreme Court of India

Order Date: September 09, 2026

Case Overview

  • Parties: The Official Liquidator representing Bhandari Co‑operative Bank Ltd. (the Bank) as appellant; respondents include Pratap (Babu) Arjun Nagvekar (deceased) through legal representatives and other private respondents who were erstwhile employees of the Bank.
  • Background: Bhandari Co‑operative Bank Ltd., a cooperative banking institution, was placed under liquidation following alleged fraudulent sanction and disbursement of rickshaw and home loans amounting to approximately Rs 20.12 crore. The alleged fraud was said to have been carried out without adherence to RBI‑prescribed procedures, the Bank’s bye‑laws, and its loan policy.
  • Section 88 Proceedings: An inquiry under Section 88 of the Maharashtra Co‑operative Societies Act, 1960 was initiated. On 25 September 2018, the authorised officer issued an inquiry report and order against 27 persons, quantifying the aggregate loss and liability at Rs 29,33,32,084 (≈ Rs 29.33 crore).
  • Appeals and High Court Judgment: The private respondents appealed the order; the appeals were dismissed by the Minister of Co‑operation, State of Maharashtra on 20 September 2019. The respondents then filed multiple writ petitions (Nos. 9377/2022, 12353/2019, 12123/2019, 12243/2019, 12325/2019, 9375/2022, 9376/2022, 9378/2022) before the High Court. The High Court, by a common judgment dated 17 January 2023, allowed the batch of writ petitions and quashed both the inquiry report dated 25 September 2018 and the appellate order dated 20 September 2019.
  • Subsequent Developments: During the pendency of the special leave petitions (SLPs), two of the private respondents—employees of the Bank—filed fresh writ petitions before the High Court seeking release of their pensionary and retiral benefits from the Bank’s estate, which remains under liquidation.
  • Legal Position on Claims: The Court noted that any claim for arrears of salary, pension, or other retiral dues must be raised before the official liquidator and adjudicated by the competent forum in accordance with law.

Final Outcome

  • The Supreme Court disposed of the three interim applications (I.A. Nos. 239525/2026, 239162/2026, 239528/2026) on the following terms:

1. No disbursement shall be made from the Bank’s estate during the pendency of the present special leave petitions, except pursuant to an order passed by the competent forum in the pending liquidation proceedings.

2. Any employee claims for salary, pension, or other retirement benefits must be filed with the official liquidator and will be considered and adjudicated as per applicable law.

Topics: Bank Liquidation, Employee Pension Claims