DBS Bank served notice in Religare deposit fraud case

NEW DELHI: Religare Finvest, which has a pending case against Lakshmi Vilas Bank (LVB) for misappropriating fixed deposits worth Rs 750 crore, has filed a petition with the Delhi High Court to make DBS Bank India a respondent in the ongoing suit, on the ground of the mergers of the two banks. The amount has swelled to Rs 900 crore along with the interest, according to Religare. 

The high court  hasn’t made DBS as a party in the case so far. However, it has issued a notice  in relation to this case on December 1 and the next hearing is on February 25, 2021. DBS has been given five weeks to respond. Religare has also sought that the court pass an order allowing substitution of DBS Bank India Limited as defendant in the present suit in place of Lakshmi Vilas Bank.

“The present application is being filed under Order XXII Rule 10 of the Code of Civil Procedure, 1908 for substitution of the defendant, Lakshmi Vilas Bank (LVB) with DBS Bank India Limited (DBS),” said Religare in its petition. LVB is alleged to have conspired with the former owners – Malvinder Mohan Singh and Shivinder Mohan Singh – to illegally siphon off and misappropriate funds from the company.  

In May, 2019, Religare had informed the exchanges that it has filed a complaint with Economic Offences Wing (EoW) of Delhi Police against LVB, RHC Holding, Ranchem Private Ltd, and some employees of these institutions, including the Singh brothers.

Religare Enterprises Chairperson Rashmi Saluja had earlier said that the fraud done by erstwhile promoters caused a damage of about Rs 4,000 crore to RFL through “unlawful and illegal actions”. This included a corporate loan book fraud of about Rs 2,300 crore, FDs and interests thereof at Rs 950 crore and other irregularities. As part of its effort to clear debt of lenders, Religare has repaid close to Rs 6,500 crore since 2018 despite being constrained by Reserve Bank of India’s corrective action plan.