SUCHIT DAVE - ATTORNEY, SUPREME COURT OF INDIA: December 2007

LEGAL RESEARCH

BRIEF FACTS:

Mr. A enters into a memorandum of understanding with a bank say for example ICICI Bank. In terms of the Memorandum of Understanding (MOU), a building with first floor of approximately 5000 sq. ft is let out to ICICI Ltd. The officer of the company orally represents that the company is willing to pay a rent of Rs.20000/- per month in terms of which the MOU has been entered into subsequently. It has also been represented that the bank seeks the premises for the purpose of opening a branch office to become functional shortly.

SHORT QUESTIONS:

Following short questions are involved:

What is the effect of Memorandum of Understanding?

What are the rights and liabilities of the parties to the MOU?

What if the bank does not get a permission to start the branch office from the RBI in terms of Section 23 of the Banking Regulation Act, 1949?

What is the legal position of the bank vis-à-vis the land-lord?

Can the bank continue to retain possession of the premises in terms of MOU (in spite of not getting permission)?

Will RBI intervene in the internal matters of the landlord and the bank?

What remedy does the landlord have, if he subsequently wants to terminate the MOU?

bilateral

multilateral

agreement

gentlemen's agreement

contract

H. R. Malhotra14 Aug 2003
COMPARATIVE CITATIONS2004 (1) ARBLR 28, 2004 (1) RAJ 89, 2003 (107) DLT 341, 2003 (8) AD(Del) 31ACTS REFERRED
Arbitration and Conciliation Act, 1996
CASE NOIa No. 4043/02 In Suit No. 2347/2001
CONCEPT – If the MOU is fraudulent, it cannot be enforced and the court has dismissed the petition.

LAWYERSG. D. Gandhi, R. K. Tiwari
.JUDGMENT TEXT

The Judgment was delivered by : H. R. MALHOTRAThis is an application made by the defendant under the provisions of Section 8 of the Arbitration and Conciliation Act, 1996 seeking directions of the Court to refer the matter to the Arbitration instead of proceeding with the suit filed by the plaintiff for recovery of sum of Rs. 10, 00, 000 there being Arbitration agreement between the parties.It is stated in the application that a Memorandum of Understanding was executed between the parties dated 9th January, 1998 incorporating various clauses of understanding between the parties about the implementation of the contract and it was further agreed in Clause 11 of the Memorandum of Understanding that in the event of any dispute between the parties, the same shall be referred to an Arbitration of a single Arbitrator or two Arbitrators. According to the applicant-defendant, the dispute in question as agitated in the plaint being a subject-matter of the Arbitrator, the same should be referred to the Arbitrator.The defendant while making this application also filed photo copy of the Memorandum of Understanding containing the Arbitration clause duly attested by the Notary. The defendant however did not file the original agreement, same having been lost and misplaced and not traced out yet.This application has been seriously contested by the plaintiff and the reply thereto has been filed by them assailing the correctness-genuineness of the Memorandum of Understanding.Plaintiff termed this documents as forged document and stated that this document had never been executed or signed by the plaintiff. To show that the such document is false and fabricated, the plaintiff stated at the first instance that the documents purported to be signed by the plaintiff has been prepared by way of traced forgery and therefore the original Memorandum of Understanding has not been filed with a view to avoid detection of forgery. It is further stated by the plaintiff that the defendant who allegedly signed this Memorandum of Understanding on 9th January, 1998 at Verna (Goa) had also signed the minutes at Bangalore on the same date and it was actually not possible for the defendant to be present at both the places on the same date and therefore according to the plaintiff Memorandum of Understanding is a forged document. This document is further assailed on the ground that the Manager of the plaintiff viz. Sh. John, was present in Delhi all through this time and as such he could not be present either at Goa or at Bangalore on 9th January, 1998 for the purpose of witnessing the document Memorandum of Understanding.Attestation of this document by Notary is also being assailed on the ground that Notary attested the photostat copy without looking into the original which according to the defendant had been misplaced. Even the judicial stamp paper on which this Memorandum of Understanding has been typed out is being challenged by the plaintiff stating therein that it was purchased much prior to the date of writing and more particularly at a time when no business had been planned and also at a time when there was no likelihood of any agreement being executed between the parties.For all these reasons the plaintiff have pleaded that Memorandum of Understanding is a blatant forgery and is based on falsehood and cannot be given any recognition in the eyes of law.Defendant has filed rejoinder to the reply of the plaintiff reasserting the averments made in their application and repudiating the allegations made in the reply. On the aspect of presence of parties at both the places i.e. Goa and Bangalore it is stated by the defendant that the distance between Bangalore and Goa is hardly 600 Kms and it is very much possible for the defendant to travel between Bangalore and Goa either by flight which takes only 50 minutes via Bombay or by Car which ordinarily takes about 7 hours.It is pertinent to point out here that the defendant failed to elaborate as to which mode of transport was availed by him for covering the distance between Bangalore and Goa. No proof has been furnished in this regard that the defendant was present at the time when minutes were signed at Goa on the same date i.e. 9th January, 1998.On the aspect of using the stamp paper much earlier to the date when Memorandum of Understanding was executed, the defendant replied that the whole exercise of executing the minutes at Goa and also exercise of executing the Memorandum of Understanding was done at a very short time. The stamp paper which was also available with the defendant was therefore used. I am not impressed by such reasons as the defendant was under legal obligation to purchase the stamp paper for the specific purpose for which it was specifically required to be used.Defendant has also not been able to produce the original Memorandum of Understanding. Since the defendant desired this Court to believe the execution of Memorandum of Understanding which has since been denied by the plaintiff, burden heavily lies on the defendant to prove the execution of such document. He ought to have discharged his obligation by producing the original documents on record which he states has since been lost or misplaced details of which are again missing. In the application nor does this application state as to whether the defendant took any step by lodging any report with the authorities about such misplacing of the document.Defendant has further stated that the signatures of the plaintiff on this document can be got verified by sending it to the Handwriting Expert. I may state that unless original document is on record, no authentic report can be expected from the Handwriting Expert as this Court has experienced in so many cases that FSL has expressed their inability to give detailed report in the absence of original documents. I am afraid if FSL would be able to give authentic report on the basis of the photostat copies of the documents. Even otherwise perusal of the photostat copies of such documents leaves doubt in my mind about authenticity of such document as it is noticed that Arbitration clause has been shown on the last page of the document despite there being sufficient space available on the pre-page i.e. Page No. 2 of the document but that sufficient space available on page 3 was left blank. Instead Arbitration clause was incorporated on the next page. If one looks to page 1 of this document this would show that this page was completely typed out whereas page 2 was not typed out in the same manner but Arbitration clause was carried forward to last page of this document. What made the defendant to do so is not understandable and therefore doubt goes in my mind about the genuineness of this document. Even otherwise defendant has not been able to show as to how he reached Goa on the same date after having signed the Memorandum of Understanding at Bangalore. The defendant was under legal obligation to clear this doubt in the mind of the Court particularly when plaintiff had taken up this plea. The defendant has deliberately concealed this fact from the Court and therefore inference can be drawn against him that this Memorandum of Understanding was never executed between the parties on 9th January, 1998.For all these reasons the application of the defendant merits dismissal. Dismissed as such.Suit No. 2347/2001List on 22nd August, 2003.

2004 DEL 1153

[DELHI HIGH COURT]

Anshuman Sharmav Manika Jain

T. S. Thakur

03 Sep 2004

BENCHT. S. Thakur

COMPARATIVE CITATIONS2004 (114) DLT 47, 2004 (77) DRJ 70, 2004 (6) AD(Del) 532ACTS REFERREDHindu Marriage Act, 1956[s. 13-B]Code Of Civil Procedure, 1908[O. 23 r. 3]Guardians and Wards Act, 1890
CASE NOCont. Cas. (C) No. 402 of 2004
Concept – If the MOU specifically states that on the event of a party breaching a condition thereto, the memorandum shall come to an end and become non-est, it so becomes upon the condition being breached.
LAWYERSRaju Ramachandran, Ketaki, Sunil Gupta, Jatin Zaveri
.JUDGMENT TEXT
The Judgment was delivered by : T. S. THAKURCustody of children often becomes the proverbial bone of contention between spouses when temperamental incompatibility or irreconcilable differences, have irretrievably wrecked, domestic peace and harmony forcing them to part company. The present is in that sense no different from other cases where the couple has gone through considerable stress and trauma before they realised that the marriage had broken down for good and all that they had to crave and fight over was peace for themselves and custody of their only child. A decree of divorce by mutual consent and a document that ostensibly settled the issue regarding the custody of the minor daughter born out of the wedlock did not, unfortunately for the parties, bring either peace to them or give quietus to the proceedings in the Court. The present contempt petition filed close on the heels of an earlier one is in that backdrop only an upshot of the proceedings that concluded with an order of this Court passed on 1st November, 2002 in Civil Revision No. 4/2002.2. The husband's case stated in a nutshell is that he had in terms of an order passed by the Court under the Guardians and Wards Act secured the custody of Himangi, their daughter which direction of the Court was challenged by the respondent wife in Civil Revision Petition No. 4/2002 filed in this Court. It was during the pendency of the said revision petition that the parties appear to have negotiated an amicable settlement, the terms whereof were reduced in writing in what is described as a Memorandum of Understanding (MOU). The custody of the minor child was in accordance with the said MOU given to the respondent wife subject to the condition that the husband would have temporary custody once in each calendar year for a period of 30 days during the time the child was free from the school in vacations. The grievance of the husband now is that in accordance with the terms settled between the parties, the husband was entitled to the temporary custody of the child, but the respondent wife has removed the child to Yangon in Myanmar where she is posted as one of the officers in the Embassy of India. The respondent has not despite demands and the terms mutually settled between the parties transferred the custody of the child to the petitioner either at Calcutta or Bangkok to which places the husband was ready to go to take such custody - his request for visa to go to Myanmar having been rejected. The husband's further case is that since the Memorandum of Understanding was filed by the parties before the Court and since the parties had agreed to abide by the terms and conditions stipulated therein, the failure of the respondent wife to adhere to the terms settled and stipulated in the said Memorandum amounts to disobedience of the undertaking given to the Court hence punishable in the contempt jurisdiction of this Court.3. The respondent wife has filed detailed objections in which it is inter alia stated that the respondent has not committed any disobedience of the order issued by this Court and that the Memorandum of Understanding even when presented to the Court in Civil Revision Petition No. 4/2002, the Court had not passed any order in the said revision petition in terms of the said Memorandum. On the contrary, the Court had dismissed the revision petition filed by the respondent as withdrawn. It is also pointed out that the Memorandum of Understanding executed between the parties itself envisaged that in the event of any violation of any stipulation contained in the said Memorandum, the party aggrieved of any such violation would be entitled to approach the Court of competent jurisdiction for appropriate relief. The petitioner's remedy in the light of the said stipulation lay in initiation of appropriate proceedings before a competent Court under the Guardians and Wards Act and not by way of proceedings in the contempt jurisdiction of this Court especially when the respondent has not committed any such contempt.4. I have heard learned Counsels for the parties at considerable length and perused the record. The short question that falls for consideration is whether this Court has passed any order, the disobedience whereof can possibly tantamount to contempt to warrant any action against the respondent. Two aspects in that connection need to be noticed at the threshold. The first is the nature of the Memorandum of Understanding executed between the parties while the second relates to the order passed by this Court by which Civil Revision Petition No. 4/2002 was disposed of. A copy of the Memorandum of Understanding executed between the parties has been placed on record, from a reading whereof, it appears that the parties had on account of an irretrievable breakdown of the wedlock decided to part company for good by seeking dissolution of their marriage by mutual consent in proceedings under Section 13-B of the Hindu Marriage Act, 1956. The Memorandum of Understanding also dealt with the question of custody of the child born out of the wedlock and made a specific provision in that regard in Para 7, which runs as under:That the parties hereto have agreed that the custody of the female child 'Hemangi' shall permanently rest with the Second Party. However, the First Party shall have the right to have temporary custody of the child once in each calendar year for a period of thirty days during school vacation of the said child irrespective of the place of post/residence of the Second Party.5. We are not for the present concerned with the other stipulations contained in the Memorandum of Understanding or the mechanism by which the petitioner husband could exercise his right of temporary custody available to him under the clause reproduced above. Significantly the understanding between the parties could remain good and workable so long as there was no violation of the obligation which the Memorandum cast upon one or the other party. What is remarkable and peculiar about the arrangement was that the event of any failure on the part of any one of the parties to carry out his/her obligation, the Memorandum reserved to the aggrieved party the right to seek appropriate remedies in the Court of competent jurisdiction. The Memorandum was in that event to become non est and null and void in the eyes of law as is evident from Para 17 of the same which may be gainfully reproduced at this stage:"That in case the terms and conditions recorded in the present MOU are not given effect to and/or implemented and/or any of the parties hereto fails to carry out his/her obligation(s) as undertaken herein or fails to appear before any Court of law to give effect to the present MOU, the present MOU shall be deemed to become non est and null and void in the eyes of law and the parties hereto would be at liberty to seek their respective remedies in Courts of appropriate jurisdictions without any prejudice to their respective rights and contentions."6. On the basis of the terms agreed between them in the Memorandum, the parties appear to have approached the competent Court for dissolution of their marriage by mutual consent. More importantly, the Memorandum envisaged withdrawal of all cases filed by the parties against each other and referred to in Paras 11, 12 and 13 of the Memorandum. In Para 13 of the Memorandum, it was specifically stated that the parties shall approach the Tis Hazari Court in Delhi seized of Guardianship Case No. 105/2001 as also the High Court of Delhi where Civil Revision No. 4/2002 was pending for disposal /withdrawal of the said cases in terms of the settlement recorded in the Memorandum of Understanding. An application was accordingly moved by the parties for the disposal of Civil Revision Petition No. 4/2002 in this Court in which this Court passed a brief order which may for the purpose of reference may be extracted in extenso:"The petition was filed by the petitioner challenging the order passed by the Guardianship Judge in proceedings under the Guardians and Wards Act. During the pendency of the petition, the parties have entered into a settlement, which is incorporated in the memorandum of understanding dated 28.10.2002, which is duly signed by both the parties as well as the witnesses. Parties are present in person and they admit that the application under Order 23 Rule 3 of the Code of civil Procedure as well as the memorandum of understanding has been signed by them voluntarily and they undertake to abide by the terms and conditions contained in the said understanding. The Counsel for the petitioner states that since the parties have arrived at an understanding and have undertaken to abide by the same, he does not want to press this petition. In view of the submissions made, the petition is dismissed as withdrawn. Parties will remain bound by the undertaking given in the Memorandum of Understanding."7. A careful reading of the above would show that Counsel for the petitioner wife had made a statement to the effect that since the parties had arrived at an understanding and had undertaken to abide by the same, he did not wish to press the revision petition. The Court had in the light of the said submission dismissed the revision petition as withdrawn thereby leaving the parties to work out their rights and obligations including their legal remedies in accordance with the understanding arrived at between them.8. It was contended by learned Counsel for the respondent and in my opinion rightly so, that the dismissal of the revision petition as withdrawn left no room for the Court to pass any effective order, the implementation whereof could be enforced through contempt proceedings or otherwise. The order of dismissal was no doubt passed in the light of an understanding between the parties but that is not the same thing as the Court incorporating the terms of understanding in the order or affixing its imprimatur on the same. The parties having resolved their differences amicably any order in the Revision Petition was considered unnecessary which was at the instance of the party filing the same dismissed as withdrawn.9. It is in the above background difficult to see how the respondent can be said to have committed the disobedience of any direction of this Court in a Revision Petition which was dismissed. There is no gainsaying that if the parties intended the dispute to be resolved finally in terms of the settlement, they could and ought to have insisted upon disposal of the Revision Petition and other proceedings in terms of the said settlement. That was not done obviously because the party who had filed the revision petition was not keen to have the settlement incorporated in the order of this Court.10. Considerable emphasis was, however, laid on behalf of the petitioner on the last line of the order which according to the petitioner constitutes a direction that will amount to incorporation of Memorandum of Understanding in the order of the Court . I regret my inability to accept that line of argument. The revision petition having been dismissed as withdrawn, it was neither legally possible nor necessary to issue any direction regarding the parties remaining bound by the terms of the Memorandum of Understanding. That apart, the last line of the order passed by this Court cannot be torn out of context or understood in a manner that may be destructive of the earlier portion which is much too clear to be capable of being understood in any fashion other than the one indicated above. It is fairly well settled that in order to justify initiation of contempt proceedings against the party, the order of the Court must be clear and unequivocal. An order which is open to equivocation in its interpretation or understanding by the parties cannot be made a basis for sustaining a contempt action which is in the nature of a quasi-criminal charge against the party who faces such proceedings. The present case even by that standard does not qualify for any further action against the respondent.11. The second aspect of the controversy is no less important. Even assuming that the order passed by this Court could be said to have incorporated the terms of the settlement between the parties, the terms so incorporated have to be read as a part and parcel of the order itself. No part of the settlement can then be excluded from consideration while examining the issue whether anyone of the parties is entitled to initiate any action for enforcement of the rights or obligation flowing from the Memorandum. A reading of Para 17 of the Memorandum leaves no manner of doubt, that the understanding between the parties envisaged that if anyone of the parties committed any default in the discharge of his/her obligations, the Memorandum of Understanding would become non est and null and void in the eyes of law. The parties to the Memorandum then had the liberty to seek their respective remedies in the Courts of appropriate jurisdiction without prejudice to their respective rights and contentions. In the present case, the husband alleges that the respondent is not facilitating the exercise of the petitioner's right for temporary custody of the child and is, therefore, violating the terms of the understanding. Assuming that to be so, Para 17 the Memorandum would render non est the arrangement leaving the petitioner free to agitate his rights for the custody of the child by agitating the matter in a Court of competent jurisdiction. The contempt jurisdiction of this Court cannot, in my opinion, provide a short-cut for that purpose, not only because this Court had dismissed the revision petition but also because even if the settlement arrived at between the parties was to be read as a part of the direction of the Court, violation of the conditions of the settlement would have the effect of effacing the settlement as also the order which may have incorporated the same.12. In the totality of the above circumstances, therefore, there is no room for taking any action against the respondent in the contempt jurisdiction of this Court. This contempt petition is misconceived and is accordingly dismissed reserving liberty to the petitioner to seek such redress as may be otherwise open to him in law before the competent Court in fresh proceedings to be instituted by him in that regard.
2001 DEL 1060
[DELHI HIGH COURT]
Structural Waterproofing & Ors.v Mr.Amit Gupta & Ors.
J. D. Kapoor11 Jul 2001
BENCHJ. D. KapoorCOMPARATIVE CITATIONS2001 (21) PTC 588, 2001 (93) DLT 496ACTS REFERREDTrade and Merchandise Marks Act, 1958
CASE NOIas.5366/2001, 5723/2001, 5783/2001 In S.No.1118/2001
Concept – Memorandum of Understanding should be implemented in the absence of fraud or misrepresentation and interim injunction does not lie in such a case for implementation of the MOU.
LAWYERSRajeev Nayar, Pratibha Singh, Praveen Anand, Rudra Kalhon
.JUDGMENT TEXT
The Order of the Court was as follows :Learned counsel for the defendants/applicants states that application under Order 39 Rule 4 CPC being I.As.5723/2001 & 5783/2001 be treated as reply to application under Order 39 Rules 1 & 2 CPC being I.A.5366/2001. I.A.5783/2001 stands merged in I.A.5723/2001 as the nature of relief in both the applications is identical.I.A.5723/2001 is for vacation for ex-parte ad interim injunction whereby applicants/defendants were restrained from using the trade mark CICO, the CICO logo as a trade mark or as part of their trade style or as a corporate name.The aforesaid ex-parte order was passed on the following representations of the plaintiff:- 1) Plaintiff is the registered proprietor of the trade mark CICO.2) Plaintiff is the owner of CICO logo.3) There was a memorandum of understanding between the parties which was more or less a family settlement which has since been challenged in the District Court, Alipore, Kolkata and as such is no more enforceable or in operation.4) That even on 15.6.2001, plaintiff is shown as registered proprietor of trade mark CICO and therefore, even if there was a Memorandum of Understanding between the parties, the applicants/defendants are not entitled to use trade mark CICO.5) That in the absence of registration of the assignment of the trade mark as required by Section 44 of the Trade and Merchandise Marks Act, 1958, the defendant cannot claim superior right over the use of the trademark CICO.Section 44 provides as under- 44.. Registration of assignments and transmissions- (1) Where a person becomes entitled by assignment or transmission to a registered trade mark, he shall apply in the prescribed manner to the Registrar to register his title, and the Registrar shall, on receipt of the application and on proof of title to his satisfaction, register him as the proprietor of the trade mark in respect of the goods in respect of which the assignment or transmission has effect, and shall cause particulars of the assignment or transmission to be entered on the register:Provides that where the validity of an assignment or transmission is in dispute between the parties, the Registrar may refuse to register the assignment or transmission until the rights of the parties have been determined by a competent court.(2) Except for the purpose of an application before the Registrar under sub-section (1) or an appeal from an order thereon, or an application under section 56 or an appeal from an order thereon, a document or instrument in respect of which no entry has been made in the register in accordance with sub-section(1), shall not be admitted in evidence by the Registrar or any court ion proof of title to the trade mark by assignment or transmission unless the Registrar or the court, as the case may be, otherwise directs.While canvassing the effect of non-registration of assignment, learned counsel has placed reliance on Brakes International Versus Tilak Raj Bagga 1997 PTC(17) page 591. Reliance has also been placed on Kohinoor Paints Faridabad(P) Ltd. Versus Paramveer Singh & Anr 1996 PTC(16) page 69-. Relevant observations in Brakes International case are as under:-
"I have already reproduced, in one of the preceding paragraphs, the proviso to Sub-section 1 of Section 44. Its bare perusal would go to show that where the validity of an assignment or transmission is in dispute between the parties, the Registrar may, in his discretion, refuse to register the assignment or transmission until the rights of the parties have been determined by a competent Court. Since the proviso invests the Registrar with such discretion which in facts and circumstances of the case he may or may not exercise, I would not like to superimpose my own Will. Not at this stage atleast."*
So far as application under Section 10 CPC is concerned, learned counsel for the plaintiffs has contended that in para 9 of the plaint following averments have been made-
"The defendants have filed a suit against the plaintiff's company being S.No.2373/2000 in the Delhi High Court in which the defendants claim to be the proprietor of the mark CICO. The said suit is pending adjudication before this Hon'ble Court. In the said suit, the defendant herein claim ownership in the said mark on the basis of Memorandum of Understanding allegedly entered into between the promotors of the plaintiffs company and the defendants who are brothers. It is, however, respectfully submitted that the plaintiffs herein is defending the said action in accordance with law. No order of injunction has been granted in favour of the defendants who are plaintiffs in the said suit."*
Vacation of stay is being sought on the ground that the plaintiffs have concealed certain facts which are important and material and had these been disclosed in proper perspective, these would have disentitled the plaintiffs to ex-parte ad interim injunction.Apart from this, the maintainability of the suit itself has been challenged as it is barred by the provisions of Section 10 CPC that place embargo upon the court to proceed with the suit with a suit in which matter in issue is also directly and substantially involved in a previously instituted suit between the same parties or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Court in India having jurisdiction to grant the relief claimed, or in any Court beyond the limits of India established or continued by the Central Government and having like jurisdiction, or before the Supreme Court. As per these provisioins the pendency of a suit in a foreign Court does not preclude the Courts in India from trying a suit founded on the same cause of action.While refuting the contention that since the validity of Memorandum of Understanding has been challenged in the court and as such it is no more in operation, learned counsel for the applicants/defendants has urged with vehemence that since all the terms of the MOU have been acted upon and given effect to, it is no more open to the plaintiff to wriggle out of it or take refuge under the cover of challenge for obtaining interim injunction. Learned counsel has, in this regard, referred to the following Clauses of MOU:
"Clause 4 :The brand name of 'CICO' as classified in Class-1 and Class-2 vide Trade Mark Registration Nos.260763 and 251898 under the Trade and Merchandise Marks Act, 1958 only and without its associated Trade Marks will exclusively become the property of the business of AG Group and/or of any other Company with AG Group may subsequently float and SG Group with do the needful and co-operate in every manner to execute a Deed of Transfer to this effect as aforesaid. While selecting the name of the existing Products of SWC the name as indicated in Annexure-1 (with or without CICO) should strictly flowed by SG and AG Group.Clause 1: Sri Sumit Gupta & family (hereinafter called the SG Group) will run the business of Construction Chemicals and allied products as usual (which includes activities of manufacturing, marketing and selling) and also their future invented/developed products including other diversification activities by SG Group under the existing banner of SWC without the brand names 'CICO'and 'TAPECRETE'. While selecting name of the product of SWC as existed on the date of executing this presence, SG will follow the name of existing products of SWC as clearly indicated in Annexure-1.Clause 2: Sri Amit Gupta and family (hereafter called the AG Group will run the business of the construction chemicals and allied products as usual including future invented developed products and other diversification activities from the existing FRC and Bengal Ceramics with CICO and TAPECRETE brand, be transferred of AG Group. While selecting name of the product of SWC as existed on the date of executing this presence AG will follow the name of existing products of SWC as clearly indicated in Annexure-1."*
As regards the contention of learned counsel for the plaintiff that for want of registration of assignment and transmission, the defendants are not entitled to protection of the trademark or logo assigned to them through Memorandum of Understanding, learned counsel for the defendants has contended that merely because trademark is not registered, the assignment does not disentitle the unregistered assignee to become the proprietor of the trademark and in support of this view, the learned counsel has placed reliance upon (i) Hindustan Lever Ltd. Vs. Bombay Soda Factory 1964 AIR(Mysore) 173;(ii) T.I.Muhammad Zumoon Sahib Vs. Fathimunnissa alias Bibijan & others 1960 AIR(Madras) 80 wherein following observations were made:-
"There is nothing in S.21 or S.35 which would support the argument that it is only the order of the Registrar under S.35 which confers a right on the heirs of the original registered proprietor to bring an action for infringement of the trade mark. Such an action is, therefore, maintainable even before an order was passed under S.35. If, subsequently, the plaintiffs file into court an order under S.35(1) recognising their title, the plaint need not be amended because the order of the Registrar under S.35 by itself does not give a cause of action. All that it gives is a recognition of the title which already inheres in the legal representatives of the deceased proprietor."Following observations were made in Hindustan Lever Ltd. case:-" that when a change in the name of the registered proprietor is required the authorities of the company need only apply under S.47, Trade Marks Act. The plaintiff could not be non-suited merely because the change in the name of the registered proprietor had not been effected by the time the suit was instituted. Registration of the name of the proprietor does not confer title on him. It is merely an evidence of his title. The plaintiff company was the owner of the trade mark in question at all times."*
Learned counsel for the applicants/defendants has also referred to the documents filed by the plaintiff including the circular dated 19.6.2000 issued to the press in the following terms:-
"Our press campaign informing all concerned about the change in our Logo, the Struco range of products etc., have started. The first advertisement in this regard has been published in "The Telegraph"(Calcutta edition dated 19.6.2000). The same is enclosed for your doing the needful."The notice enclosed with the circular was to the effect that:-" This is to inform all concerned that the following changes in the Brand Names of our Products will come into effect from 1.6.2000 whereby Brand Name CICO was replaced by Brand Name STRUCO."*
Similarly by way of Board resolution dated 14.3.2000, Mr.Sumit Gupta was authorised to sign Deed of Transfer/Assignment. The said Deed of Transfer/Assignment dated 14.3.2000 is duly signed by Mr.Sumit Gupta.I am afraid mere challenge by the party to the validity of Memorandum of Understanding either on facts or non-registration of an assignment does not prima facie entitle the party to backtrack the terms of the Memorandum of Understanding agreed to and acted upon particularly for the purpose of interlocutory injunction by virtue of doctrine of estoppel and acquiescence as such right is either subject to the final outcome of the main suit or the suit challenging the validity of Memorandum of Understanding.However, without going into this aspect of the matter whether the Memorandum of Understanding was executed by way of playing fraud or coercion but in view of the fact that each and every term of Memorandum of Understanding has been acted upon and given affect to by both the parties, the plaintiff is not entitled to interim injunction against the terms of settlement.The cumulative affect of these facts and circumstances is that plaintiff for the purpose of interlocutory injunction has not succeeded in proving that prima facie case is in its favour or that balance of convenience lies in its favour and that it will suffer irreparable loss and injuries in case injunction is refused.Apart from this, Section 10 CPC also comes to the rescue of the defendant as it is admitted that defendants have instituted a suit for injunction against the plaintiffs bearing no.S.2373/2000 before this court wherein the validity of Memorandum of Understanding and use of trademark CICO is under challenge, since the matter in issue in this suit is directly or substantially involved in the previously instituted suit between the same parties, plaintiffs are not at least entitled for interlocutory injunction.In the circumstances, applications under Order 39 Rule 4 CPC being I.As.5723/2001 & 5783/2001 are allowed and the interim order dated 29.5.2001 stands vacated. As a consequence, application under Order 39 Rules 1 & 2 CPC results in the dismissal.11th July, 2001 J.D. KAPOOR, ssb JUDGE.IN THE HIGH COURT OF DELHI

2006 SC 616
[SUPREME COURT OF INDIA]
Jai Beverages Private Limitedv State of Jammu and Kashmir and Others
B. P. Singh12 May 2006
BENCHB. P. Singh, Tarun Chatterjee & Altamas Kabir(Appeal from judgment/order dated --- in LPA (W) NO 73/2004 of the JAMMU AND KASHMIR HIGH COURT)COMPARATIVE CITATIONS2006 (4) SCJ 401ACTS REFERREDCentral Sales Tax Act, 1956 [s. 8(5)]Jammu and Kashmir General Sales Tax Act, 1962[s. 5]
CASE NOCivil Appeal No. 7147 of 2004
Concept – If the MOU has been entered into and conditions to such an MOU are complied with, the benefits which accrue should be extended to the party in terms of the MOU.
LAWYERSK. Venugopal, Ravi Aggrawal, M.G. Ramachandran, K.V. Mohan, K.V. Balakrishnan, Mukul Rohtagi
.JUDGMENT TEXT
The Judgment was delivered by : B. P. SINGHThe appellant herein claiming to be a"prestigious unit" having a capital investment of over Tax and Central Sales Tax under exemption from payment of General Sales Rs.25 crores claimed Notification No. SOR 247 of August 201998 issued by the Government of Jammu & Kashmir pursuant to its Industrial Policy of 1998-2003. Under the said Industrial Policy, a package of incentives was offered industrial units; and in particular to prestigious units" having a capital investment of Rs 25 crores or more. The appellant Company set up a soft drink manufacturing unit in Jammu. The claim of the appellant was negatived by the State Government, which led to the filing of two writ petitions before the High Court of Jammu and Kashmir. A learned single Judge of the High Court dismissed the writ petitions holding that the petitioner was not entitled to the incentives claimed under the aforesaid Industrial Policy, as it did not validly acquire the status of a "prestigious unit". Aggrieved thereby the appellant preferred a Letters Patent Appeal which was dismissed in limine by the judgment and order of the High Court dated October 4, 20042.To appreciate the issues involved, it would be necessary to notice the background facts giving rise to this controversy. The facts are as under :-Pursuant to the Cabinet decision of May 15, 1998, sanction was accorded to the new Industrial Policy 1998-2003 as per Annexures 'A' and 'B' to the package of incentives appended to GO No.202 IND of 1998 dated May 27, 1998. A package of incentives was offered for the development of large/medium/small and tiny industries in the State of Jammu and Kashmir. Paragraph 6 of GO No.202 of 1998 provided that the Industries and Commerce Department shall notify negative lists referred to in the new package of incentives, in consultation with Finance Department.3. The relevant part of the package of incentives contained in Annexure 'B' relates to exemption from payment of General Sales Tax etc. and is as follows :-"8. General Sales Tax(i) There will be no GST on sales of finished goods by the existing local SSI units till 31.3.2003 and for a period of 5 years from the date of production in case of new SSI units except on items brought on negative list.(ii) There will be no GST on the raw material procured by the local SSI, Medium and Large units except on items brought on the negative list.(iii) There will be no GST on the sale of finished goods manufactured by the new Medium and Large industrial units up to a ceiling on such amount of GST which would have been otherwise payable equivalent to 150% of the total capital investment made in the unit or for a period of 5 years from the date of production whichever occurs earlier, except on items brought on the negative list.(iv) There will be no GST on purchase of machinery and equipment for construction of the factory for a period of 5 years from the date of provisional registration by the SSI units.(v) The above concessions shall also be available to SICOP while acting on behalf of local registered SSI units.9. Central Sales TaxThe local existing SSI units shall be exempt from charging and payment of CST on sale of their finished goods outside the State up to 31.3.2003 and the new SSI units for a period of 5 years from the date of production.10. Special provision for "prestigious units(1) Not withstanding anything contained in paras 7, 8 and 9 above, prestigious units i.e. those having capital investment of Rs.25 crores or above shall have the option to avail of full exemption from payment of GST, CST and special/additional toll tax for a period of 5 years from the date of production or until such amount of exemption reaches the level of 150% of capital investment in the project whichever occurs earlier.(2) Not withstanding anything contained in para 7, 8 and 9 above those prestigious units which come into commercial production in the year 1998, shall have the option to avail a power tariff freeze at the rate of Rs.1 .50 per unit for a period of five years from the date of commercial production.For purposes of paras 7, 8, 9 & 10 above, all the new units shall also have the option to count the period of 5 years from the date of production or from the succeeding financial year".4. On August 20, 1998 a Notification was issued by the Government of Jammu and Kashmir exempting "prestigious units" from payment of General Sales Tax and Central Sales Tax for a period of 5 years from the date of production or until such amount of exemption reaches the level of 150% of capital investment in the project, whichever occurs earlier. The Notification is re-produced below for the sake of convenience."SRO-247. In exercise of the power conferred by Section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 (XX of 1962) and read with sub-section (5) of Section 8 of the Central Sales Tax Act, 1956 (Act No. 74 of 1956), the Government of Jammu & Kashmir hereby direct that the prestigious units, i.e., those having capital investment of 25 crores or above shall have the option to avail of full exemption from payment of general sales tax and Central Sales Tax for the period of 5 years from the date of production or until such amount of exemption reaches the level of 150% of capital investment in the project, whichever occurs earlier."5. On the same date, Notification No. SRO 249 was issued regarding exemption of General Sales Tax on sale of finished goods manufactured by medium and large scale industries. It is worth noticing that this Notification refers to the exemption from the payment of General Sales Tax granted to medium and large scale industrial units. It makes no reference to small and tiny units as also to "prestigious units". Moreover, a separate Notification was issued on the same day relating to grant of such exemption to "prestigious units". It is the case of the appellant that this Notification related only to medium and large scale industries and did not in any manner curtail exemptions granted to "prestigious units" by Notification SRO 247 issued on the same date. The proviso to Clause 6 of the Notification provided that the incentives granted shall not apply to goods specified in the Schedule. There is no dispute that "soft drinks" has been shown as item No.VIII in the Schedule to Notification SRO 249 dated August 20, 1998.6. In the mean time having regard to the Industrial Policy announced by the Government of Jammu and Kashmir, the appellant, whose unit was registered as a medium scale industry, applied to the Government making a proposal for investment of Rs.25 crores or more pursuant to the Industrial Policy of the Government so that it could acquire the status of a "prestigious unit" and be entitled to all the incentives provided in the Industrial Policy for such a unit. The proposal was discussed in a meeting attended by the Chief Minister, Finance Minister, the Minister for Industries and Commerce, Chief Secretary, Principal Secretary, Managing Director SIDCO, and the Chairman of the appellant Company. The revised proposal was considered and it was observed that no departure from the new industrial policy was involved if the investment materialised concurrently with the availment of incentives. However, it was felt that a liberal view needed to be taken of the policy to the extent that if the investment of Rs.25 crores or more materializes within the maximum period of six months from the date of commercial production, the company should be given the benefit of incentives. A Memorandum of Understanding (for short 'MOU') for this purpose had to be executed by and between J&K SIDCO and the appellant Company. The proposal had the concurrence of the Finance Minister whereafter a Memorandum was submitted to the Cabinet which was approved vide Cabinet decision No.7/2 dated January 19, 2000. Accordingly, SIDCO respondent No.7, signed a MOU with the appellant Company on the above lines.7. The MOU signed on February 1, 2000 recites the fact that the appellant Company had applied to the State Government to give permission to set up a Soft Beverages bottling plant and that the State Government had agreed to grant permission to it and authorize its nodal agency respondent No.7 SIDCO to enter into a Memorandum of Understanding. It is also noticed that the unit proposed to be set up by the appellant involved capital investment of around Rs.27.50 crores. The other relevant parts of the MOU read as under:-"AND WHEREAS the State Government has agreed to grantincentives and subsidies to JBPL which are applicable to the prestigious units as per new Industrial Policy (1998-2003) right from the date of commercial production which is expected to start from the end of March 2000 so as to make huge capital investment viable. SIDCO and JBPL are desirous of recording the terms and conditions agreed between and by the parties, which are appearing hereinafter in this Memorandum of Understanding.JBPL shall start manufacture of soft beverages in the existing built up accommodation at Bari Brahmana Jammu premises of erstwhile Hindustan Lever Ltd. by end of March, 2000 and complete the minimum capital investment of Rs.25 crores or more latest by 30.9.2000.M/s. JBPL shall become eligible to avail and be entitled to all incentives and subsidies currently applicable to prestigious units in pursuance of the Industrial Policy in vogue as published vide Govt. order No.202-IND of 1998 dt. 27lh May, 1998 right from the date of commercial production against to the condition that JBPL makes an investment of not less than Rs.25 crores as capital investment which is a pre-requisite for qualifying as a prestigious unit.JBPL undertakes to start commercial production by end of March 2000 in the existing available infrastructure and complete the minimum investment of Rs.25 crores with a period of six months i.e. by end of Sept. 2000. In the event of failure of JBPL to make investment of at least Rs.25 crores (prestigious unit) JBPL undertakes to refund the incentives, if any, availed as prestigious unit alongwith interest at Bank rates, besides entailing other consequences as laid down in the relevant laws".8. A reading of the Memorandum of Understanding leaves no manner of doubt that the industrial unit to be set up involved a minimum capital investment of Rs.27.50 and was an industrial unit for the manufacture and bottling of Soft Beverages. It was also clearly understood that the commercial production was to start by end of March, 2000 and the minimum investment of Rs.25 crores must be made within a period of six months i.e. by end of September, 2000. In the event of the failure of the appellant to make investment as agreed, the appellant undertook to refund the incentive, if any availed of, as a "prestigious unit" together with interest. It was also clearly understood that the appellant shall become eligible to avail and be entitled to all incentives and subsidies currently applicable to "prestigious units" in pursuance of the Industrial Policy as published on May 27, 1998 from the date of the commercial production.9. Pursuant to the MOU, on February 17, 2000 the SIDCO executed a Deed of Lease in favour of the appellant Company granting to it lease hold rights in respect of land measuring 133.6 kanals for a period of 90 years.10. On April 25, 2000 SIDCO issued a certificate to the effect that the appellant was entitled to avail of incentives as a prestigious industry from the date of its commercial production in accordance with the Industrial Policy 1998-2003. The certificate reads as under:-"TO WHOMSOEVER IT MAY CONCERNThis is to certify that a Memorandum of Understanding has been signed by J&K State Industrial Development Corporation (SIDCO) with M/s Jai Beverages Pvt. Ltd. (JBPL) to set up a bottling plant having an installed capacity of 800 BPM with a capital investment of more than 25 crores. This- is pursuant to the cabinet decision No.7.2 dated 10-1-2000. As per Memorandum of Understanding, executed with J&K SIDCO on 1st February, 2000 JBPL will avail incentives as prestigious industry right from the date of commercial production in accordance with the new Industrial Policy 1998-2003 (in vogue), subject to the condition that the company completes the investment before 30lh Sept. 2000 failing which they will refund the incentives availed with interest. The SRO 247 dated 20-8-98 issued vide No.FD-ST/163.98 governing release incentives to prestigious units reads as under:-"The Govt. of J&K hereby direct that the prestigious unit i.e. having capital investment of Rs.25.00 crores or above shall have the option to avail exemption from payment of GST/ CST for a period of 5 years from the date of production or until such amount of exemption reaches the level of 150% of capital investment of the project which ever occur earlier".In the light of the above JBPL is entitled to avail incentives as a prestigious unit from the date of commercial production.(Raman Soni) General Manager"11. On April 25, 2000, the Officer on Special Duty in the Department of Industries and Commerce, Government of Jammu and Kashmir wrote to the Principal Secretary and Secretary to Finance Department that in view of the MOU signed with the appellant Company pursuant to the Cabinet decision of January 1, 2000, a SRO be issued permitting the appellant to avail of incentives as "prestigious unit" from the date of commercial production.12. On June 14, 2000 the Directorate of Industries and Commerce also granted a certificate substantially to the same effect as the one granted by SIDCO which reads as follows:-"TO WHOMSOEVER IT MAY CONCERNAs certified by General Manager, J & K State Industrial Development Corporation Limited, Regional Office, Vir Marg, Jammu vide NO.:IDG/ROJ/99/803 dated 25-04-2000, it is further certify that a Memorandum of Understanding has been signed by J & K State Industrial Development Corporation (SIDCO) with M/s. Jai Beverages Pvt. Ltd. (JBPL) to set up a bottling plant having an installed capacity of 800 BPM with a capital investment of more than 25 crores. This is pursuant to the cabinet decision No.7/2 dated 10-01-2000. JBPL will avail incentives as prestigious industry right from the date of commercial production in accordance with the new Industrial Policy 1998-2003 (In vogue), subject to the conditions that the company completes the investment before 30lh September, 2000 failing which they will refund the incentives availed with interest. The SRO 247 dated 20-08-1998, issued vide No.FD/ST/ 163/98 governing release incentives to prestigious units reads as under:-"The Govt. of J & K hereby direct that the prestigious unit i.e. having capital investment of Rs.25 crores or above shall have the option to avail exemption from payment of GST/ CST for a period of 5 years from the date of production or until such amount of exemption reaches the level of 150% capital investment of the project whichever occur earlier."In the light of the above JBPL is entitled to avail incentives as a prestigious unit from the date of commercial production. (DEVINDER K. N.) IAS Director of Industrial & Commerce, J & K Govt., Srinagar".13. By order of December 12, 2000, the Director of Industries and Commerce, Government of Jammu and Kashmir declared the appellant Unit a "prestigious unit". The relevant part of the order is as follows:-"Whereas M/s. Jai Beverages Pvt. Ltd. have submitted a certificate from the Chartered Accountants M/s. O.P Bagla & Co., Kalkaji Extn. New Delhi regarding capital investment ending 30-09-2000, certifying that an investment of Rs.2711.59 Lacs has been made by the company.Whereas the details incorporated in the Chartered Accountants certificate have been authenticated by the General Manager, District Industries Center, Jammu, vide his letter No. Dia/MD/12875dated24-ll-2000. Whereas the J&K State Industrial Development Corporation have inspected the Unit and verified the investment made to the tune of Rs.27.12 crores and conveyed vide their letter No. IDC/CO/PROJ/803-II/ 1136 dated 9-12-2000.Now, therefore, on the basis of documents submitted by M/s Jai Beverages (P) Ltd. and as certified by the General Manager, District Industries Centre, Jammu and J&K State Industrial Development Corporation Ltd., M/s. Jai Beverages (P) Ltd., located at Industrial Complex, Bari Brahamana, Jammu is declared as a prestigious Unit defined in terms of new Industrial Policy dated 27-5-1998 thereby qualifying for incentives enshrined in the policy and the SRO NO.247 of 20-8-1998 issued by the Finance Department".14. This order clearly states that on verification it has been found that the appellant has made investment to the tune of Rs.27.12 crores by September 30, 2000.15. It would thus appear from the Notifications, Orders and Certificates noticed above that the appellant signed a MOU with SIDCO pursuant to a Cabinet decision to set up an industry with a capital investment of more than Rs. 25 crores for the manufacture and bottling of soft beverages. As between the parties, it was clearly understood that the unit to be set up by the appellant shall be entitled to avail of the package of incentives offered by the Industrial Policy to the "prestigious units". The commercial production was to commence by March 30, 2000 and the investment of Rs.25 crores or more was to be made on or before September 30, 2000. The certificates issued by the authorities establish that commercial production had commenced as agreed and that investment of over Rs.27 crores by way of capital investment had been made by September 30, 2000.16. By a communication dated July 4, 2002 addressed by the Under Secretary to the Government in the Department of Industries and Commerce to the Director, Industries and Commerce, it was conveyed that the competent authority had not agreed to grant exemption from payment of Sales Tax/Toll Tax to the appellant. Aggrieved thereby, the appellant filed the first Writ Petition before the High Court being OWP No.613 of 2002 praying for quashing of the letter dated July 4, 2002 and for issuance of a Writ of Mandamus commanding the respondents to allow exemption from payment of Sales Tax and Toll Tax to the appellant in respect of its prestigious industrial unit in accordance with the Government Order dated May 27, 1998, SRO 247 dated August 20, 2000 and MOU dated February 1, 2000. The appellant also prayed for other ancillary reliefs .17. On October 25, 2002 a communication was issued by the Department of Industries and Commerce to the effect that the orders issued by the Directorate of Industries and Commerce according prestigious status to the units named therein had been kept in abeyance till the cases were considered by the competent authority i.e. State Level Committee-I. One of the units mentioned therein is that of the appellant.18. This decision of the Government was also challenged before the High Court in OWP No. 1166 of 2002.19. Both the writ petitions were heard together and disposed of by a common judgment and order dated July 30, 2004 dismissing the writ petitions.20. Before the learned Judge, who disposed of the two writ petitions, it was urged on behalf of the respondents that in terms of SRO 247, an industrial unit accorded the status of a "prestigious unit" was one in which a capital investment of Rs. 25 crores or more was made. This investment was to be made as the initial investment, i.e. the investment of Rs.25 crores was to be made at the time when the unit went into commercial production, and not at a later stage of its development. It was, therefore, urged that since the unit of the appellant commenced its production on April 24, 2000 and by this date an investment of Rs. 25 crores or more had not been made, it was not entitled to the incentives offered to a "prestigious unit" under the provisions of Notification No. SRO 247 issued pursuant to the Industrial Policy. Secondly it was urged that the negative list applied to large and medium scale industrial units and, therefore, the appellant which was registered as a medium scale industrial unit could not avail of incentives if it was involved in the manufacture of goods specified in the schedule to Notification SRO 249. "Soft drinks" being one of the goods specified in the schedule, the appellant was not entitled to any incentive in terms of SRO 249. Thirdly it was argued that any decision of the Industries Department declaring the unit of the appellant as a "prestigious unit" could not supercede Notification SRO 249, and in any case the same was not binding on the Sales Tax Department. The Finance Department could grant the exemption only if it found the unit eligible for such incentives in terms of SROs 247 and 249. Fourthly it was argued that since the Cabinet had reconsidered its decision and refused the exemption claimed, the Finance Department and the Sales Tax Department were justified in denying such incentives to the appellant, and in insisting upon payment of tax in accordance with the provisions of the Jammu & Kashmir General Sales Tax Act, 1962.21. On the other hand the appellant contended that there was no separate registration of a "prestigious unit". A medium or large scale unit was different from a "prestigious unit" in the sense that if the capital investment made in a particular industrial unit was Rs. 25 crores or more, it was granted the status of a "prestigious unit" and was eligible for the incentives available to a "prestigious unit". The appellant had invested a sum of over Rs. 27 crores within the period prescribed in the Memorandum of Understanding and, therefore, it was entitled to be regarded as a "prestigious unit". So far as the negative list was concerned, it was the case of the appellant herein that the negative list was only applicable to medium and large scale industrial units and not to "prestigiousunits" having a capital investment of Rs.25 crores or more. It was also submitted that the decision to enter into a Memorandum of Understanding was taken at the highest level, namely at the Cabinet level, and the period for making the investment of Rs.25 crores or more was prescribed in the said Memorandum of Understanding, Factually it could not be disputed that by September 30, 2000 the investment made by the appellant was more than Rs.27 crores. The appellant had, therefore, fulfilled all the conditions laid down by the Government for acquiring the status of a "prestigious unit". Necessary certificates had been issued by the concerned departments of the Government and it was also certified, after verification, that the appellant had invested a sum of Rs.27.12 crores by way of capital investment by September 30, 2000. It is the case of the appellant that if the terms and conditions laid down in the Notifications issued by the State of Jammu and Kashmir pursuant to its Industrial Policy decision are fulfilled the appellant is entitled to be treated as a "prestigious unit". It was not of much significance that such a declaration had not been issued by the Department of Finance but was issued by the Department of Industries and Commerce and J&K SIDCCX22. The learned Judge held that in terms of SRO 247 an investment of Rs. 25 crores was required to be made by way of initial investment in the case of a "prestigious unit". Any investment made at a subsequent stage was immaterial and, therefore, since on the date of commencement of commercial production i.e. 24th April, 2000 a sum of Rs. 25 crores had not been invested, the appellant could not be declared to be a "prestigious unit" entitled to the incentives provided under SRO 247 dated August 20, 1998. The High Court further held that the Government had not issued any SRO declaring the appellant unit as a "prestigious unit". The appellant unit was registered as a medium scale unit and, therefore, it was for the Government to take a decision as to whether the industrial unit fulfilled the eligibility conditions specified and indicated in SROs 247 and 249. Negative list appended to SRO 249 had to be kept in mind while declaring a unit as "prestigious unit" under SRO 247. Though not so clearly spelt out, the learned Judge, came to the conclusion that SROs 247 and 249 had to be read together and any medium scale or large scale industrial unit producing goods specified in the schedule were not entitled to the incentives under those Notifications.23. It was further held that the Director Industries and Commerce was not competent to declare the unit as a "prestigious unit", as it was only the Government which could take a decision in this regard by issuing a SRO on being satisfied that the industrial unit was eligible to claim the incentives.24. On such findings the learned Judge by his judgment and order of July 30. 2004 dismissed both the writ petitions.25. The Letters Patent Appeal preferred by the appellant was dismissed in limine by order dated October 4, 2004.26. Having regard to the facts and circumstances of the case and the findings recorded by the High Court, principally two questions fall for our consideration. Firstly, whether the industrial unit set up by the appellant fulfilled all the necessary conditions for being declared a "prestigious unit". In this connection it has to be considered whether the appellant had made the necessary investment of Rs. 25 crores or more within the period prescribed. Secondly, whether the negative list appended to SRO 249 applies to "prestigious units" as well. If it is held that the industrial unit set up by the appellant fulfilled all the conditions of eligibility for being considered to be a "prestigious unit", and if the negative list appended to SRO 249 is not applicable to the "prestigious units", it must follow that the appellant is entitled to the package of incentives promised to the "prestigious units" under the Notifications issued by the State pursuant to its industrial policy. It is not of much consequence as to whether the declaration, that the industrial unit set up by the appellant is a "prestigious unit", was issued by SIDCO or by the Department of Industries and Commerce, or that it should have been issued by the Department of Finance or the Government of Jammu and Kashmir.27. Mr. K.K. Venugopal, learned senior counsel appearing on behalf of the appellant, submitted that the package of incentives announced by the State included certain benefits relating to payment of General Sales Tax and Central Sales Tax. Annexure 'B' appended to GO No. 202 of May 27, 1998 provided for certain concessions to small scale industrial units as well as well as medium and large scale units except on items brought on the negative list. The package is contained in paragraphs 8 and 9 of Annexure 'B' which we have quoted earlier in this judgment. Paragraph 10 of Annexure 'B' relates to special provisions for "prestigious units" and it begins with the words "Not withstanding anything contained in paragraphs 7, 8 and 9 above". Thus the provision in regard to "prestigious units" is a special provision confined to "prestigious units" i.e. those having capital investment of Rs. 25 crores or above. The benefit envisaged under paragraph 10 is full exemption froirTpayment of General Sales Tax and Central Sales Tax and Special/ Additional Toll Tax for a period of 5 years from the date of production or until such amount of exemption reaches the level of 150 % of capital investment in the project, whichever occurs earlier.28. SROs 247 and 249 were both issued on the same date, namely on August 20, 1998. SRO 247 provides that the "prestigious units" shall have the option to avail of full exemption from payment of General Sales Tax and Central Sales Tax for a period of 5 years from the date of production or until such amount of exemption reaches the level of 150 % of the capital investment in the project, whichever occurs earlier. This exemption which was granted by the State Government in exercise of powers conferred by Section 5 of the Jammu & Kashmir General Sales Tax Act, 1962 read with sub-section (5) of Section 8 of the Central Sales Tax Act, 1956, does not refer to any negative list.29. On the other hand SRO 249 issued on the same date provides that finished goods manufactured by newly established medium and large scale industrial units registered with the Department of Industries and Commerce shall be exempted from payment of General Sales Tax, which would have been otherwise payable, equivalent to 150 % of the total capital investment made by the unit or for a period of 5 years from the date of production whichever occurs earlier subject to the conditions specified therein. It is not necessary for us to notice the conditions specified therein, but the proviso to paragraph 6 of the Notification is to the effect that the exemptions granted under SRO 249 shall not apply to goods specified in the Schedule. Thus no exemption was permissible to medium and large scale industrial units for the manufacture of goods mentioned in the Schedule, which includes "Soft Drinks". It was, therefore, submitted by Mr. Venugopal that the negative list contained in SRO 249 is applicable only to "medium and large scale industrial units" and not to "prestigious units" contemplated by SRO 247. Both the SROs, namely 247 and 249 were issued on the same date i.e. August 20, 1998. Whereas SRO 249 contains the negative list and confines its application to medium and large scale industrial units, there is no such limitation in SRO 247. Moreover Annexure 'B' to Government Order No. 202 of 1988, particularly paragraphs 8 and 9 thereof refer to certain benefits conferred on small scale, medium scale and large scale units. Sub-paragraphs (i), (ii) and (iii) of paragraph 8 in terms provide that the benefits contained therein shall not be available to units which manufacture items brought on the negative list. Paragraph 10 begins with non obstante clause and in terms provides that notwithstanding anything contained in paragraphs 7, 8 and 9, "prestigious units" shall have the option to avail of full exemption from payment of General Sales Tax, Central Sales Tax etc.30. Mr. Rohtagi, learned senior counsel appearing on behalf of the State, submitted that there is no reason why the negative list must not apply to all industrial units, whether small scale or medium scale or large scale or even "prestigious units". According to him the concept of negative list is the same and there is no reason why "prestigious units" should be treated on a different footing from other units in the matter of application of negative list.31. Having perused Annexure 'B' to G.O. No. 202 of 1988 of May 27, 1998 ; SRO 247 and SRO 249 issued on August 20, 1998, we are of the view that the negative list concept is not applicable to "prestigious units". Paragraph 10 of Annexure 'B' to G.O. No. 202 of May 27, 1998 in terms provides a special package of incentives for "prestigious units" and begins with the words "notwithstanding anything contained in paragraphs 7, 8 and 9" above. In paragraphs 8 (i), (ii) and (iii) certain benefits are conferred on small scale units, medium scale units and large scale units in the matter of payment of General Sales Tax, except on items brought in the negative list. There is no mention of the negative list in paragraph 10 of the G.O. which clearly brings out the intention of the Government to treat "prestigious units" on a different footing altogether. Similarly, SRO 247 which grants exemption to "prestigious units" from payment of General Sales Tax and Central Sales Tax does not refer to the negative list. Even SRO 249 to which the negative list is appended as a Schedule, only refers to finished goods manufactured by newly established, "medium and large scale" industrial units but does not refer to "prestigious units" which are treated as a separate class altogether.32. It was sought to be argued before us that a "prestigious unit" also must fall in the category of medium or large scale industrial unit. Therefore, it was not reasonable to exclude the "prestigious units" while applying the negative list to medium and large scale industrial units. The submission is not tenable. This is a matter of policy, and if the Government decides as a matter of policy to treat the "prestigious units" on a different footing than medium and large scale industrial units, the Courts will not interfere unless it is shown that there is something arbitrary or unreasonable in such classification. Large industrial undertaking provides greater employment opportunities and makes a large contribution to the State exchequer by way of revenue, and this may very well be a reason for according a special status to "prestigious units". It is worth noticing that while the Government's Industrial Policy deals with tiny, small, medium and large scale industrial units, the negative list is made applicable by SRO 249 only to medium and large scale industrial units. Obviously tiny and small scale industrial units have been excluded so far as SRO 249 is concerned. Under paragraphs 8(i) and 8(ii) of GO. No. 202 of 1998, the negative list is made applicable to small scale industrial units in so far as sale of finished goods and purchase of raw-materials is concerned, but does not make it applicable to tiny units. It thus appears that wherever the negative list is made applicable it is so expressly provided. There is nothing in any of the Notifications which may lead us to hold that the negative list applies to "prestigious units" as well. On the contrary the language employed in paragraph 10 of G.O. No. 202 of 1998, which begins with the non obstante clause, support the conclusion to the contrary. We, therefore, hold that the negative list concept does not apply to "prestigious units". This is how the Government also understood its Industrial Policy and the Notifications issued thereafter. As we have noticed earlier the matter was considered at different levels by high powered committee presided over by the Chief Minister of the State himself and it was understood that the proposal of the appellant did not involve departure from the new Industrial Policy. The matter was thereafter considered by the Finance Department and lastly by the Cabinet which approved the proposal and permitted SIDCO to sign a Memorandum of Understanding with the appellant. It was known to the Government that the industrial unit being set up by the appellant was a soft beverages manufacture and bottling plant with a capacity of approximately 800 bottles per minute. It was also known to the Government that approximate capital investment for the project was around Rs. 27.50 crores. Being fully informed of these facts, the Government agreed to grant incentives and subsidies to the appellant which were applicable to the "prestigious units" as per new Industrial Policy (1998-2003) from the date of commercial production i.e. from the end of March, 2000. Thus the Government also, after considering the proposal at various levels, came to the conclusion that the plant for manufacture and bottling of soft beverages being set up by the appellant with an investment of about Rs.27.50 crores was entitled to the package of incentives promised to the "prestigious units" in the new Industrial Policy. After the Memorandum of Understanding was signed and the industrial unit set up at a cost of over Rs. 27 crores, the Government appears to have changed its mind and, in our view unreasonably.33. This takes us to the next question as to whether the industrial unit set up by the appellant qualifies as a "prestigious unit" in terms of SRO No.247 dated August 20, 1998. We have earlier reproduced the aforesaid Notification. The Notification contemplates a "prestigious unit" as being one which has a capital investment of Rs.25 crores or more. Neither the aforesaid Notification nor the Industrial Policy itself prescribes the date by which the investment of Rs.25 crores must be made. It is not the case of the State that if the commercial production commenced by 30"' September, 2000, by which date Rs. 27 crores and odd had been invested, the unit set up by the appellant would not have been entitled to be reckoned as a "prestigious unit". The objection taken is that on the date of the unit coming into production, the investment was below Rs. 25 crores, though the investment was to the tune of over Rs. 27 crores by 30th September, 2000.34. It will be seen from the Memorandum of Understanding that the appellant was to start manufacture of soft beverages in the existing built up accommodation by the end of March, 2000 and complete the minimum capital investment of Rs. 25 crores or more latest by 30lh September, 2000. Mr. Rohtagi, learned senior counsel appearing on behalf of the State, also could not dispute the fact that the appellant had invested a sum of Rs.27.11 crores as on September 30, 2000. This fact is admitted in the order of the Director, Industries and Commerce dated December 12, 2000 which declared the appellant as a "prestigious unit". It also appears from the same order that the matter had been examined by the General Manager, District Industries Center, Jammu and J&K State Industrial Development Corporation Ltd. This was also supported by a certificate issued by the Chartered Accountants of the appellant which had been authenticated by the General Manager, District Industries Center, Jammu. This is also apparent from the two certificates issued by the General Manager, District Industries Center, Jammu and J&K State Industrial Development Corporation Ltd. as also from the communication dated April 25, 2000 of the Industries and Commerce Department recommending that SRO be issued permitting the appellant to avail of incentives as a "prestigious unit" from the date of commercial production. Thus it would appear that the Government took a conscious decision to permit the appellant to complete the minimum capital investment of Rs. 25 crores latest by September 30, 2000. It also appears from the letter of the Industries and Commerce Department dated April 25, 2000 that while discussing the proposal of the appellant it was felt that a liberal view needs to be taken of the policy to the extent that if the investment of Rs. 25 cores or more materializes within the maximum period of 6 months from the date of commercial production, the appellant should be given the benefits of the incentives. This proposal had the approval of the Finance department as also the approval of the Cabinet, which did not consider it as a departure from the policy announced.35. All these facts, therefore, lead to the only conclusion that having considered its new Industrial Policy, and having considered the proposal made by the appellant, the Government took a conscious decision to grant the package of incentives to the industrial unit being set up by the appellant provided it went into commercial production by the end of March 2000 and made the necessary investment of Rs. 25 crores or more on or before September 30, 2000. The documents and material on record disclose that the Government took this decision after full discussion on all aspects of the matter, and in particular by reference to the date by which the appellant was required to invest Rs.25 crores in the industrial unit being set up by it. The State Cannot be permitted to ignore its own conscious decision to permit the appellant to invest a sum of Rs. 25 crores or more by September 30, 2000. The appellant acted on the basis of the decision taken by the State Government and incorporated in the Memorandum of Understanding. The fact that Rs.25 crores was invested by September 30, 2000 was not disputed in the several counter-affidavits filed before the High Court. In view of the voluminous evidence on record the State cannot dispute the fact that over Rs.27 crores was invested by the prescribed date i.e. by September 30, 2000. In this background, the State cannot be allowed to say that the incentives cannot be extended to the industrial unit set up by the appellant because the amount of Rs.25 crores or more was not invested by the date the unit went into commercial production, though the amount of Rs.27 crores was invested within the period prescribed by the Government as incorporated in the Memorandum of Understanding.36. We, therefore, find no substance in the objection of learned senior counsel appearing on behalf of the State of Jammu and Kashmir that the appellant had not fulfilled the requirement of making the investment of Rs.25 crores or more by the date it went into commercial production. As we have noticed the Government itself was of the view that within the framework of the policy formulated by it, it was permissible to prescribe a time schedule within which the investment of Rs.25 crores or more was to be made. Accordingly it required the appellant to invest a sum of Rs.25 crores or more before September 30, 2000 which the appellant did. We have also not been shown anything in the Policy or in the Notifications issued pursuant thereto, prescribing any date for the capital investment of Rs.25 crores or that within the framework of the policy, the State Government was not entitled to prescribe a date by which the investment of Rs.25 crores or more should be made.37. In view of our findings that the negative list concept does not apply to prestigious industrial units and that the industrial unit set up by the appellant fulfilled all the conditions laid down in the Government's new Industrial Policy and the notifications issued in connection therewith, it must be held that the appellant is entitled to the package of benefits promised by the new Industrial Policy of the State of Jammu & Kashmir read with various notifications issued pursuant thereto.38. The question as to whether the certificates issued by the SIDCO or by the Department of Industries and Commerce are valid, or whether the declaration made by the Industries and Commerce Directorate by its order dated December 12, 2000 declaring the appellant a "prestigious unit" is binding on the State Government, has no significance. The appellant having fulfilled all the conditions which it was required to fulfil is entitled to the benefits promised to "prestigious units" under the State's new Industrial Policy (1998-2003).39. We, therefore, set aside the judgment and order of the High Court of Jammu &Kashmir in L.P.A. No. 73 of 2004 and allow the writ petition filed by the appellant. It is declared that the appellant is entitled to all the incentives and subsidies applicable to" prestigious units" under the New Industrial Policy published vide Government Order No. 202-IND of 1998 dated May 27, 1998 and the notifications issued pursuant thereto from the date the aforesaid unit went into commercial production. This appeal is accordingly allowed without any order as to costs

1993 CLB 25
[THE COMPANY LAW BOARD]
Simret Katyalv Mahavir Ice Mills Private Limited and Others
S. BALASUBRAMANIAN (MEMBER)30 Nov 1993
BENCHS. BALASUBRAMANIAN & A. R. RAMANATHANCOMPARATIVE CITATIONS1995 (83) CC 699CASES REFERRED TOHemendra Prasad Barooah and Another v Bahadur Tea Company P. Limited Messrs World Wide Agencies Private Limited and Another v Margarat T. Desor and Others Mrs. Margaret T. Desor and Others v Worldwide Agencies Private Limited and Others Shakuntala Rajpal and Others v Mckenzie Philip (India) P. Limited and Others Khadija and Another v P. K. Mohammed P. Limited and Others ACTS REFERRED Companies Act, 1956[s. 108, s. 111]Indian Succession Act, 1925[s. 372, s. 387]
Concept – Injunction can be granted on the basis of the MOU which depicts petitioner as a sole heir. The MOU and consent decree formed the basis of injunction.
.JUDGMENT TEXT
The Judgment was delivered by S. BALASUBRAMANIAN (MEMBER)This is a petition filed under section 111 of the Companies Act, 1956, on April 16, 1992, against Mahavir Ice Mills Private Ltd. (hereinafter called "the company") and two others, praying for rectification of the register of members of the company and to register transmission of 18, 321 equity shares held by the late Shri Harinder Katyal, in favour of the petitioner. The company was incorporated on February 8, 1949. The authorised capital of the company is Rs. 10 lakhs. The petitioner is the widow of the late Harinder Katyal who was a shareholder and director of the company. The deceased was also the brother of respondents Nos. 2 and 3, who are the directors of the company. Shri Harinder Katyal who died on February 11, 1990, held 18, 321 equity shares of Rs. 10 each in the company. Subsequent to his death on April 30, 1990, the petitioner and respondent No. 2 entered into a compromise in a litigation pending between them in the High Court of Delhi, in which a memorandum of settlement was signed resulting in settling some of the disputes between the two parties. A consent decree was passed by the Hon'ble Delhi High Court accordingly. In the above proceedings, respondent No. 2 has acknowledged the petitioner as the sole heir and respondent No. 3 was a witness to the said memorandum of understanding. According to the petitioner by virtue of the operation of law, the petitioner is entitled to the shares held by her husband, the late Harinder Katyal. The company is presently not doing any business but owns certain properties. It is stated in the petition that the petitioner wrote to the company on April 27, 1991, for transmission of the said shares but it was declined to be accepted by the respondents.It was further stated that the same demand was made through her advocate by notice dated May 15, 1991, and the respondents evaded service of these notices and the same were returned. After several efforts, the petitioner sent a notice on January 16, 1992, which was also returned unserved. It is stated that the petition is filed within a period of four months of sending intimation of transmission of shares, by operation of law.The petitioner alleged that the respondents are evading the service of notice from the Bench. On further direction the petitioners could serve on respondent No. 3 but were not successful in serving on respondents Nos. 1 and 2.The case was fixed up for various dates from August 26, 1992, to July 19, 1993, and on nearly six occasions adjournment was sought by the respondents on the ground of the compromise proposal or otherwise.On July 21, 1992, the petitioner filed an application for interim relief to (i) restrain the company and its directors from transferring or alienating any property and assets of the company ; (ii) restrain the directors from altering in any way the shareholding of the company.At the hearing held on August 26, 1992, counsel for the respondents undertook that no transfer of the property or assets of the company will be done before the next hearing. On July 20, 1992, respondent No. 3 had also filed an affidavit undertaking that she shall not be a party to any transaction for the purpose of transferring, alienating or parting with the possession of any assets of the company, both movable and immovable, till the transmission is duly registered. Respondent No. 3 has also admitted in her reply all the facts stated in paras 1 to 18 of the petition.A reply on behalf of respondents Nos. 1 and 2 was received on September 14, 1992. It is stated in the reply that the petitioner is the sole proprietor of the firm, Universal Poultry and Breeding Farm, which was previously owned by her late husband, which owed a sum of Rs. 3, 73, 113 besides interest to the respondent-company and as such the company has a paramount lien on every share standing in the name of the late Harinder Katyal. The petitioner has not lodged the original share scrips along with certified copy of the order passed by the court of a competent jurisdiction granting probate and/or letter of administration. It is further stated that the late Harinder Katyal had been alienating, transferring, pledging, etc., the shares in favour of financial institutions and other creditors from whom he has been taking money by way of loan and/or deposits. There is no evidence in the petition to show whether the share scrips in question have not been charged or pledged, and no one else has any interest on them. No letters, including letters allegedly dated April 27, 1991, May 15, 1991, or January 16, 1992, were tendered to or refused by the respondents. Since neither the instrument of transfer and/or the original share certificates have been submitted nor the intimation of the transmission been delivered to the company, the question of refusal of registration does not arise. No copy of the will of the late Harinder Katyal has been given to the company/respondents nor has the same been filed before this Bench. The reply states that the petitioner has filed a petition under section 372 of the Indian Succession Act on August 7, 1990, for grant of a succession certificate with respect to the said shares, which has been suppressed by her. As such the right of the petitioner is already sub judice and the issue raised here is substantially the issue before the succession court. It is stated that in view of the above, the Company Law Board should dismiss the petition.The issues raised before us relate to :(i) Whether the petition is maintainable;(ii) Whether the petitioner has a title to the impugned shares;(iii) if the petitioner has a title, whether the register of members should be rectified.Shri M. S. Vinaik, advocate for the petitioner, refuted the preliminary objections that any money is owed by the petitioner's late husband as no evidence has been produced. He further quoted the articles as well as Table "A" of the Companies Act to the effect that lien can be exercised only in respect of partly paid shares whereas in the present case, the shares are fully paid. In this connection, he cited Khadija v. P. K. Mohammed (P.) Ltd. 1982 KER 81 (Ker) to state that in relation to dealings in shares whether in respect of transfers or transmissions or in respect of sales in exercise of the lien the provisions of the Companies Act, 1956, and those in the memorandum and articles of association of the company should govern the matter. He also refuted the charge of pledge of shares as no evidence has been produced in this regard. Referring to the contention of non-submission of the share certificates and other relevant documents, counsel referred to the proviso to section 108(1) by which the company has the power to register as shareholder any person to whom the shares are transmitted by operation of law. He also cited the case of World Wide Agencies (P.) Ltd. v. Margaret T. Desor 1989 SC 348 (SC) to emphasise the point that when a member dies his estate is entrusted with legal representatives. He also referred to Hemendra Prasad Barooah v. Bahadur Tea Co. (P.) Ltd. 1991 GUW 45 (Gauhati) which reiterates the devolution of property on the legal representatives. He further stated that the succession certificate should not be insisted upon when the directors have knowledge about the successors and that the loss of the share certificates cannot be a reason to decline registration of the transmission. In this connection, he cited Shakuntala Rajpal v. McKenzie Philip (India) (P.) Ltd. 1984 DEL 115 (Delhi). In this case, the following relevant point was highlighted (headnote) :
"In the case of transmission of shares by operation of law, estate duty clearance certificate should not be insisted upon. Moreover, the status of the petitioners as children of S had not been disputed and in the circumstances, the respondents should not have insisted upon asking for succession certificate or estate duty clearance."*
As regards providing a copy of will, he drew our attention to the memorandum of understanding between the petitioner and the respondent which recognises the petitioner as the sole heir and which has been the basis of the consent decree. As regards cause of action and attraction of the jurisdiction of this Bench, the counsel submitted that the petition has been made under section 111 for rectification of the register, in which case there is no pre-condition of lodgment of documents or time limits. He, however, emphasised that intimation was given to the respondents through registered letters which were refused.Shri M. S. Vinaik, advocate, stated that there are conflicting statements in the replies of respondents Nos. 2 and 3. Whereas respondent No. 3 has admitted all the facts mentioned in the petition, respondent No. 2 has challenged the petition. He stated that there are three conflicting contentions of respondent No. 2 in the different papers on record with regard to the shareholding of the late Shri Harinder Katyal, and the right of the petitioner as the sole heir. These three contentions can be seen in the reply of respondent No. 2, memorandum of understanding before the Hon'ble Delhi High Court and the objections filed by respondent No. 2 in the succession court.As regards the petition for a succession certificate, it was clarified that the succession certificate was needed to facilitate establishment of petitioner's rights in various other claims. According to the advocate, under section 387 of the Indian Succession Act, this will not be a bar to the transmission of shares.The advocate also drew our attention to the provisions of article 8(b) of the articles of association of the company which enables transfer by a member to his family members and, as such, there is no restriction in the articles. Counsel submitted that the petitioner has inherited these shares from her late husband and she being the sole heir is entitled to the shares and the same has been acknowledged by respondent No. 2 and evidenced by the memorandum of understanding.Shri A. S. Chandiok, advocate, appearing on behalf of respondents Nos. 1 and 2, submitted that a purported copy of the will of the petitioner's late husband is filed for the first time along with the rejoinder on Septemher 25, 1992. The will is not dated. There is a specific reference to the house property belonging to the executant but no specific reference to the shares. Further, if the will had existed before April 30, 1990, it should have been referred to in the memorandum of understanding dated April 30, 1990. He also referred to a copy of the application for succession certificate filed by the petitioner and stated that there is no reference to the will in that petition either. He further stated that subsequent to the memorandum of understanding two suits have been filed by the petitioner and she herself has gone to a succession court for issue of a succession certificate. This only goes to show that she herself is not confident about her entitlement. The advocate further submitted that the refusal by the company to register is conspicuously absent. There is no intimation to the, company of transmission. The advocate cited the case of Margaret T. Desor v. World Wide Agencies 1988 DEL 53 (Delhi) to the effect that when the succession is not established, the company can refuse transmission. The respondent's counsel also drew our attention to article 8(d) of the articles of association to state that the directors can refuse transfer in order to exercise the right of lien as the provisions relating to transfer apply to transmission as well. He also emphasised that the application for issue of a succession certificate was prior in period of time and the Bench should avoid conflicting decisions. He further stated that there is nothing wrong in insisting on the production of a succession certificate by the board of directors. He also stated that the company is still willing to register the transmission in case the requirements of law are complied with.After the arguments were complete, both the parties were allowed liberty to submit written statements supplementing their case before August 6, 1993. The respondents were also allowed the liberty to register the shares on condition that in case the proceedings in the succession court are adverse then the respondents will be at liberty to come seeking rectification of the register of members. Both the parties accordingly made their written submissions which reiterate the entire written submissions already made and the arguments advanced by them during the hearings.We have carefully considered the petition, the replies and rejoinder and the arguments of learned counsel. We have also examined the written submissions in detail. We have noted in the written submission that the respondents have challenged the ownership of 5, 000 shares by the deceased which they had not done in their initial reply. The arguments relating to maintainability are mainly based on the plea that (a) the petitioner's proprietary firm is indebted to the respondent company and that the company is entitled to exercise the right of lien on the shares ; (b) no intimation to the company for registration of transmission has been served ; (c) there is already a petition by the petitioner in the succession court which involves the same issues, and (d) share scrips along with the relevant documents were not produced and there was no refusal and as such the Company Law Board has no jurisdiction.We find that neither in the reply nor during the arguments were the respondents able to substantiate the alleged liability of the petitioner's proprietary firm and as such it is a bald statement without any support. The petitioner's counsel also referred to the articles of association of the company which permits the applicability of Table "A" of the Companies Act to this company. He also referred to clause 9 of Table A which permits the company to have a lien only on partly paid shares and not on the fully paid shares. As such the plea of indebtedness and exercise of the right of lien by the company has no basis.With regard to the non-production of share scrips and other relevant documents by the petitioner, the contention of the petitioner that the share scrips were lying in the premises of the company since the deceased member was a director, is a plausible one. It is stated that the office of the company is in the premises of Bhagwandass and Co. Pvt. Ltd. which is now in the control of respondents Nos. 2 and 3. It is also not established by the respondents that the share scrips are in the possession of someone else. Still this is not a formidable problem and the same could have been got over by proper public notice before issuing a duplicate share scrips. As regards other relevant documents, a specific exemption has already been contemplated under the second proviso to section 108(1). Since the parties are closely related to each other there is no justification to insist on the filing of any instrument of transmission. The petitioner's counsel has also rightly drawn our attention to various cases to establish that a company can register transmission without an instrument of transmission. The decision of the Delhi High Court in Shakuntala Rajpal v. McKenzie Philip (India) (P.) Ltd. 1984 DEL 115 is very relevant which states that the lack of a succession certificate cannot be a reason for declining to register transmission.As regards the question of non-intimation and non-refusal, therefore, the lack of jurisdiction of the Company Law Board, we have noted that the petition has been filed under section 111 and the prayer is for rectification of the register of members. A petition under section 111 may lie either under sub-section (2) or sub-section (4). Whereas sub-section (2) deals with an appeal on a refusal by the board of directors, sub-section (4) deals with an application for rectification of the register. In the latter case there is no limitation of time and there is no pre-condition of a refusal by the board of directors. Though the petition is stated to be under section 111 the prayer makes it clear that it is an application for rectification of the register.As regards the objection of parallel proceedings, we have noted that the petition for issue of a succession certificate does cover the impuged shares. In this connection, the petitioner has drawn our attention to the provisions of section 387 of the Indian Succession Act which specifically states that even the decision of the succession court is no bar to the trial of the same question in any other court. In view of the above we decide that the petition is maintainable.As regards the title of the-petitioner as a legal heir to these shares, it is an admitted fact that there are no other legal heirs and that the petitioner is the only legal representative of the deceased. This is evident from the memorandum of understanding which constituted the basis for the consent decree dated May 17, 1990 of the Delhi High Court in 1. A. No. 3939 of 1990. It was argued by the respondents that the petitioner herself is not confident about her title and hence she has gone to the succession court for issue of a succession certificate in respect of the impugned shares. It was submitted on behalf of the petitioner that since the memorandum of understanding has clearly established the petitioner as legal representative and since the succession certificate was needed for certain other purposes they had to resort to the petition in the succession court. He also met the arguments of the respondents that the will of the deceased was produced only subsequently along with the rejoinder since they had presumed that since respondent No. 2 is a signatory, the memorandum of understanding has already established their entitlement. He also met the arguments of the respondents about the contents of the will including the date of the will. It is worthwhile to keep in mind the fact that out of the two directors, one is the brother-in-law and the other is the sister-in-law of the petitioner. It is also established that respondent No. 2 and the petitioner are living in the same premises. The memorandum of understanding dated April 30, 1990, signed by the petitioner and respondent No. 2 is witnessed by respondent No. 3.We are convinced on the basis of material produced before us that the petitioner is the only legal representative and has a valid title to the shares by operation of law. However, in view of the pending proceedings in the succession court, we shall take appropriate notice of this fact while considering reliefs hereunder.The respondents have submitted that any decision of the succession court would be a judgment in rem final and conclusive whereas the decision in the present case would not be a judgment in rem. Hence, they prayed that in the interest of justice and judicial propriety, the Company Law Board should stay the present proceedings to avoid inconsistency in decision. As regards the contention of 5, 000 shares standing in the name of someone else and not the deceased, it appears to be a clear afterthought. These shares were stated to be in the name of the deceased's late mother. The various annual returns, copies of which were produced by the petitioners do not substantiate the contention of the respondents.In view of the petitioner's apprehensions of transfer/alienation of properties of the company and since the succession court's decision is no bar to the proceeding here, we do not consider it necessary to stay our proceedings. We are already convinced that the petitioner has title to the impugned shares. We, therefore, order that respondent No. 1 shall register transmission of 18, 321 equity shares standing in the name of the late Harinder Katyal to the name of the petitioner within four weeks from the date of receipt of a copy of this order and the register of members of the company rectified accordingly. If the share certificates are not traceable, the respondent-company may issue at the petitioner's cost a public notice in at least two newspapers circulating in Delhi, one in English and the other in Hindi, within a week of the receipt of a copy of this order, and if no objection is received from any one the shares shall be registered accordingly. In case any objection is received the respondents are at liberty to approach this Bench for appropriate relief. The respondents are given the liberty to approach this Bench with a petition for rectification of the register in case the succession court disentitles the petitioner to the impugned shares. Both the parties are at liberty to seek any clarification with regard to this order.No order as to costs.

RBI/2007-08/55
DBOD.No. BL.BC.16 /22.01.001/2007-08
July 2, 2007
Aashadha 11, 1929(Saka)
All Scheduled Commercial Banks and Local Area Banks
(excluding RRBs)
Dear Sirs,
Section 23 of Banking Regulation Act, 1949 – Master Circular on Branch Authorisation
As you are aware, with the announcement of the revised policy on branch authorisation, the Reserve Bank of India
had issued a Master Circular DBOD.No. BL.BC.11/22.01.001/2006 dated July 1, 2006 on the captioned subject,
which is now updated upto 30th June 2007. A copy of the revised Master Circular is enclosed. It may be noted that
the Master Circular consolidates and updates all the instructions contained in the circulars listed in the Appendix, in
so far as they relate to branch authorisation. The Master Circular has also been placed on the RBI website
(http://www.rbi.org.in).
2. Foreign banks may be guided by paragraph 19 of this Master Circular.
Yours faithfully,
( P. Vijaya Bhaskar)
Chief General Manager
Contents
Paragraph Subject Page No.
No.
I. POLICY ASPECTS
1. LEGAL REQUIREMENT .............................………….. 4
2. DEFINITION …............................................................ 4
3. BRANCH AUTHORISATION POLICY .........……… …. 5
II. PROCEDURAL ASPECTS
4. PROCEDURE FOR APPLICATION ....................... ... 6
5. VALIDITY OF AUTHORISATIONS ………………….. 8
6. OPENING OF BRANCHES ............................................. 8
7. SUBSTITUTION OF CENTRE …………………. ….. 8
8. SETTING UP OF CENTRAL PROCESSING CENTRES/
BACK OFFICES ……………………………………………………….. 9
9. CALL CENTRES ............................................................ ………… 9
10. BUSINESS FACILITATORS/ BUSINESS CORRESPONDENT
MODEL …………………………………………………….. ……….. 9
11. DOORSTEP BANKING……………………………………………… 10
12. SHIFTING OF BRANCHES
12.1 General……………………… …..…………………………… 10
12.2 Shifting within the centre (city/ town/village)……………… 11
12.3 Rural branches
12.3.1 Within the block ………………………………….. . 11
12.3.2 Outside the block …………………………………. 11
12.4 Metropolitan, Urban and Semi Urban branches ………… 12
13. CONVERSION OF BRANCHES
13.1 Conversion of Specialised Branch ……………………….. 12
13.2 Conversion of general banking branches to any type
of specialized branch ……………………………………… 13
13.3 Upgradation of Extension Counters into full-fledged branches… 13
13.4 Conversion of Rural Branch into Satellite Office ……………… 13
14. MERGER OF BRANCHES
14.1 General…………………………………………………………….. 13
14.2 Merger of Sole Rural/ Semi Urban Branch……………………… 14
14.3 Merger of Metropolitan, Urban and Semi Urban Branches …. 14
15. CLOSURE OF BRANCHES
15.1 General…………………………………………… 14
15.2 Closure of Rural branches ……………………… 15
15.3 Metropolitan, Urban and Semi - Urban branches......... 15
III. MISCELLANEOUS ASPECTS
16. ACQUISITION OF PREMISES - OPENING OF BRANCHES …. 15
17. POPULATION GROUP WISE CLASSIFICATION OF CENTRES 16
18. REPORTING TO RESERVE BANK OF INDIA ................... 16
19. FOREIGN BANKS .............................................................. 17
ANNEX – I .......................................................... 18
ANNEX – II ........................................................... 22
ANNEX –III ........................................................... 23
ANNEX – IV (A) ........................................................... 24
ANNEX – IV (B) ........................................................... 26
ANNEX – IV (C) ........................................................... 27
ANNEX – IV (D) …………………………………………… 28
ANNEX – V ............................................................. 31
ANNEX – VI ............................................................. 36
ANNEX – VII ............................................................. 37
ANNEX – VIII ............................................................ 38
ANNEX – IX ............................................................. 39
ANNEX – X ............................................................. 40
APPENDIX ............................................................. 60
Master Circular on Branch Authorisation
I. POLICY ASPECTS
1. Legal Requirement
The opening of new branches and shifting of existing branches of banks is
governed by the provisions of Section 23 of the Banking Regulation Act, 1949.
In terms of these provisions, banks cannot, without the prior approval of the
Reserve Bank of India (RBI), open a new place of business in India or abroad
or change, otherwise than within the same city, town or village, the location of
the existing place of business. Section 23 (2) of the Banking Regulation Act
lays down that before granting any permission under this section, the Reserve
Bank may require to be satisfied, by an inspection under Section 35 or
otherwise, as to the financial condition and history of the banking company,
the general character of its management, the adequacy of its capital structure
and earning prospects and that public interest will be served by the opening
or, as the case may be, change of location of the existing place of business.
Therefore, it is mandatory for commercial banks and urban cooperative banks
to obtain prior approval of Reserve Bank of India before opening a new
branch/ office. Commercial banks including Local Area Banks (other than
RRBs) should approach Department of Banking Operations & Development,
Central Office, Urban Co-operative Banks should approach Urban Banks
Department and Regional Rural Banks should approach Rural Planning and
Credit Department in this regard.
The following guidelines relate to the policy for authorisation of branches in
India.
2. Definition
For the purpose of branch authorisation policy, a “branch” would include a fullfledged
branch, a satellite office, an Extension Counter, an off-site ATM
(Automated Teller Machine), administrative office, controlling office, service
branch (back office or processing centre) and credit card centre. A call centre
will not be treated as a branch. A call centre is one where only accounts or
product information is provided to the customer through tele-banking facility
and no banking transaction is undertaken through such centres. Also, no
direct interface with clients/ customers is permitted at call centres.
3. Branch Authorisation Policy
(i) With the objective of liberalising and rationalising the branch
authorisation policy, a framework for a branch authorisation policy
which would be consistent with the medium term corporate strategy
of banks and public interest has been put in place. In addition to the
requirement relating to the financial condition and history of the
banking company, the general character of its management, the
adequacy of its capital structure and earning prospects, the branch
authorisation policy framework would have the elements
enumerated in the following paragraphs.
(ii) As regards the public interest dimensions of the policy framework,
the following aspects would be kept in view in processing the
authorisation requests:
(a) The RBI will, while considering applications for opening
branches give weightage to the nature and scope of banking
facilities provided by banks to common persons, particularly in
underbanked areas (districts), actual credit flow to the priority
sector, pricing of products and overall efforts for promoting
financial inclusion, including introduction of appropriate new
products and the enhanced use of technology for delivery of
banking services.
(b) Such an assessment will include policy on minimum balance
requirements and whether depositors have access to minimum
banking or “no frills” banking services, commitment to the basic
banking activity viz., acceptance of deposits and provision of
credit and quality of customer service as, inter alia, evidenced
by the number of complaints received and the redressal
mechanism in place in the bank for the purpose.
(c) The need to induce enhanced competition in the banking sector
at various locations.
(d) Regulatory comfort will also be relevant in this regard. This
would encompass:
 compliance with not only the letter of the regulations but also
whether the bank’s activities are in compliance with the spirit
and underlying principles of the regulations.
 the activities of the banking group and the nature of
relationship of the bank with its subsidiaries, affiliates and
associates.
 quality of corporate governance, proper risk management
systems and internal control mechanism.
(iii) As regards the procedural aspects, the existing system of granting
authorisations for opening individual branches from time to time has
been replaced by a system of giving aggregated approvals, on an
annual basis, through a consultative and interactive process. Banks'
branch expansion strategies and plans over the medium term would
be discussed by the RBI with individual banks. The medium term
framework and the specific proposals would cover the opening,
closing, shifting, merger and conversion of all categories of
branches including ATMs. Normally, the authorisations/ approvals,
given on an annual basis would be valid for one year, from the date
of communication.
(iv) In terms of the new branch authorisation policy, banks will not be
required to approach Regional Offices of Reserve Bank of India for
“licence”. Banks are advised to follow the undermentioned
procedure scrupulously, in order to comply with the requirements of
Section 23 of Banking Regulation Act, 1949.
II. PROCEDURAL ASPECTS
4 Procedure for application
4.1 Based on the medium term strategy and considerations outlined in
paragraph 3 above, banks should submit on an annual basis detailed
proposals for opening new branches at specific centres in the prescribed
Form VI (Rule 12) in terms of Banking Regulation (Companies Rules), 1949,
to the Department of Banking Operations and Development, Central Office,
Reserve Bank of India, Mumbai for approval. The Proforma of Form VI is
enclosed in Annex - I. The summary of branches and off-site ATMs proposed
to be opened may be submitted as per proformae in bilingual format in Annex
II & III. Along with this, information sought in Annex IV (A, B, C & D) should
also be furnished. The Form VI is not required to be submitted in respect of
Off-site ATMs, Administrative Offices/ Controlling Offices, Credit Card Centres
and Back offices/ Processing Centres.
4.2 Banks are free to submit their annual branch expansion plan any time
during the year. It is not linked either to the financial year or calendar year.
The annual branch expansion plan should include specific proposals for
opening, closing, shifting, merger and conversion of branches where approval
of RBI is required in terms of the extant instructions. Conversion would
include upgradation of Extension Counter into a full-fledged branch,
conversion of a specialised branch into another category of specialised
branch or into a general banking branch. Requests for conversion of a general
banking branch into a specialised branch would be examined on a case-tocase
basis. The annual branch expansion plan will be discussed with the
bank, normally, within four weeks from its submission and approvals thereof
will be communicated thereafter.
4.3 Notwithstanding the above, banks may approach RBI for any urgent
proposals regarding opening of branches, especially in rural/ underbanked
areas(districts), anytime during the year, in addition to the approvals given
under the annual plan, which would be considered on merit.
4.4 The Annual Branch Expansion Plan (ABEP) and any other proposals
required to be submitted to RBI in this regard should have approval of Board
of Directors of the Bank or such other authority to which powers have been
delegated by the Board of the bank.
5. Validity of authorisations
5.1 The validity of the authorisation granted would be one year from the date
of the issue of consolidated letter of authorisation/ permission issued to
banks.
5.2 Generally, no extension in validity period of the authorisations
would be allowed. However, in case the bank is unable to open a particular
branch due to genuine reasons during the validity period of one year, they
may approach the Regional Office concerned of RBI / DBOD, CO (in respect
of branches in Maharashtra & Goa), for extension of time for a period not
exceeding six months.
5.3 At centres where a bank fails to open a branch within the validity period of
the authorisation i.e. one year (or within the extended time of six months, as
the case may be), the permission granted would automatically lapse and if the
bank is still interested in opening the branch at that centre, it should include
the same in their next Annual Plan.
6. Opening of branches
6.1 Banks may include all proposals for opening of branches in the annual
branch expansion plan. Banks may note that for opening of rural branches
approval of District Consultative Committee (DCC) is not required. Banks are
encouraged to open branches in under banked districts and rural centres. In
order to facilitate banks to identify centres in underbanked districts, a list of
such districts is given in Annex V.
6.2 Further, new private sector banks are required to ensure that at least
25% of their total branches are in semi-urban and rural centres on an
ongoing basis.
7 . Substitution of centre
7.1 While finalising the centre/ place for opening of a branch, banks should
make proper assessment, keeping in view the business potential for opening
of the branch thereat. Normally substitution of centres would not be allowed.
However, under exceptional circumstances, if banks are unable to open
branch at the proposed centre due to genuine problem, banks should
approach DBOD, CO alongwith reasons thereof, once in a year. The bank
should submit Form VI in respect of the new centre. All such requests will be
examined on a case-to-case basis.
7.2 Substitution of centres would be allowed to centres of a similar population
group or to a lower population group provided banks undertake to open the
branch within the period of validity of authorisation issued. Further, the
substitution would not be allowed from a centre in underbanked district to a
centre in other than underbanked district.
8. Setting up of Central Processing Centres/ Back offices
Banks may also set up Central Processing Centres (CPCs)/ Back Offices
exclusively to attend to back office functions such as data processing,
verification and processing of documents, issuance of cheque books, demand
drafts etc. on requests received from other branches and other functions
incidental to banking business. These CPCs/ Back Offices should have no
interface with customers. These CPCs/ Back Offices would be termed as
Service Branches and would not be allowed to be converted into General
Banking Branches. The proposals for these CPCs/ Back Offices may be
included in the annual branch expansion plan.
9. Call Centres
As no banking transaction is undertaken at a call centre, no permission is
required for establishment of a “call centre” as defined in paragraph 2.
However, details of opening, closure and shifting of call centres should be
reported to RBI as provided in paragraph 18.
10. Business Facilitator/ Business Correspondent Model
With the objective of ensuring greater financial inclusion and increasing the
outreach of the banking sector, banks have been permitted to use the
services of Non-Governmental Organisations / Self Help Group
(NGOs/SHGs), Micro Finance Institutions (MFIs) and other Civil Society
Organisations (CSOs) as intermediaries in providing financial and banking
services through the use of Business Facilitator/ Business Correspondent
Model as per the guidelines issued in this regard vide RBI circulars dated
DBOD.No.BL.BC.58/22.01.001/2005-2006 dated January 25, 2006 and
DBOD.No.BL.BC.72/22.01.009/2005-2006 dated March 22, 2006.
11. Doorstep Banking
Banks are permitted to prepare schemes for offering Doorstep Banking
facilities to their customers (including individuals, Corporate, PSUs,
Government department etc.), with the approval of their Boards, in
accordance with the guidelines issued by Reserve bank of India vide circulars
No.DBOD.BL.BC.59/22.01.010/2006-2007 dated February 21, 2007 and
DBOD.BL.BC.99/22.01.010/2006-2007 dated May 24, 2007.
12. Shifting of branches
12.1 General
(a) Shifting of branches should be part of the medium term corporate strategy
of branch expansion. Accordingly, proposals requiring approval of RBI should
be included in the annual branch expansion plan as per proforma in Annex
VI.
(b) Banks should, however, ensure that customers of the branch, which is
being shifted, are informed well in time before actual shifting of the branch so
as to avoid inconvenience to them.
(c) The details of shifting (i.e. new address, date of shifting etc.) should be
reported to the Regional Office concerned of RBI / DBOD CO(in respect of
branches in Maharashtra & Goa) immediately after shifting the branch, and in
any case not later than two weeks after the shifting.
(d) No amendment in licence would be required in such cases. The Regional
Office concerned of RBI / DBOD CO (in respect of branches in Maharashtra &
Goa) will confirm in writing of having taken on record the new
address/location.
12.2 Shifting within the centre (city/ town/ village)
Banks have been given freedom to shift a branch to any location within the
centre (city/ town / village) without seeking prior approval from RBI. As such,
these cases should not be included in the annual branch expansion plan for
our approval.
12.3 Rural branches
12.3.1 Within the block
As a matter of policy, shifting of sole rural branch outside the centre /
village is not permitted, as such shifting would render the centre
unbanked. However, under exceptional/unforeseen circumstances (natural
calamity, adverse law and order conditions) if the bank is compelled to shift
any sole rural branch outside the centre, DCC approval should be obtained
and proposal thereof should be included in the annual plan for our
consideration.
Banks are, however, free to shift their rural branches, from centres which are
served by more than one branch of a commercial bank, without obtaining prior
approval of RBI. While considering shifting of branches, banks should keep in
mind the role entrusted to these branches under the Government sponsored
programmes. The shifting of branches should also meet the following
minimum criteria:
(i)The new centre is of the same or lower population group as the existing
centre e.g. a branch at a rural centre can be shifted to another rural centre
only; and
(ii)A branch located in underbanked district can be shifted to another centre
in an underbanked district only.
12.3.2 Outside the Block
Requests for shifting of branches from centres, which are served by more
than one commercial bank branch (excluding Regional Rural Bank
branch ) outside the block should be included in the annual branch expansion
plan and the same will be considered based on the following parameters:
(i) Branches being shifted are in existence for five years or more and are
incurring losses consecutively for the last three years;
(ii) Branches located at centres prone to certain natural risks such as, floods,
landslides or likely to be submerged due to construction of dams or affected
by any natural calamities etc;
(iii) Branches functioning in places where law and order problem, insurgency
or terrorist activities pose threat to bank personnel and property;
(iv) Branches where the premises occupied by the bank are in a dilapidated
condition or burnt/destroyed and no suitable premises are available at the
centre etc.
12.4 Metropolitan, Urban and Semi Urban branches
(a)The banks may at their discretion shift their branches in
metropolitan/urban/semi urban centres within the municipal revenue limit of
that centre i.e. city/town without prior approval from RBI.
(b) Banks may also shift their branches within the same State (except single
semi urban branches as such shifting would render the semi-urban centre
unbanked) subject to the minimum criteria stated in para 12.3.1 (i) & (ii)
above.
As such, these cases should not be included in the annual branch expansion
plan for our approval.
13. Conversion of branches
13.1 Conversion of Specialised branch
Banks may convert a specialized branch into another category of specialized
branch or a general banking branch at their discretion. However, it may be
ensured that details thereof are advised to the Regional Office concerned of
RBI / DBOD, CO (in respect of branches in Maharashtra & Goa) immediately
after the conversion of the branch, and in any case not later than two weeks
after conversion. No amendment to licence would be required. The Regional
Office concerned / DBOD, CO (in respect of branches in Maharashtra & Goa)
would confirm having taken on record the new nomenclature of the branch.
Such cases should not be included in the annual branch expansion plan for
our approval.
13.2 Conversion of general banking branches to any type of specialized
branch
Proposals for conversion of general banking branches to any type of
specialized branch should be included in the annual branch expansion plan
for our approval. Such requests would be examined on a case-to-case basis.
Details of such requests may be furnished in Annex VII.
13.3 Upgradation of Extension Counters into full – fledged branches
Banks are free to convert their existing Extension Counters (ECs) into fullfledged
branches as per their discretion and relocate them within that centre.
However, banks should surrender the licences of Extension Counters and
obtain a permission letter for full-fledged branch before effecting upgradation,
from the Regional Office concerned of RBI/ DBOD CO(in respect of ECs in
Maharashtra & Goa). Such cases should not be included in the annual
branch expansion plan for our approval.
13. 4 Conversion of Rural branch into Satellite Office
Conversion of a rural branch into satellite office is generally not favoured.
However, in exceptional circumstances, such a case may be considered. The
proposals for conversion of rural branches into satellite offices should be
submitted along with the annual branch expansion plan after obtaining the
approval from the District Consultative Committee (DCC) for our
consideration.
14. Merger of branches
14.1 General
(a) Banks should, ensure that customers of the branch, which is being merged
(transferor branch) are informed well in time before actual merging of the
branch so as to avoid inconvenience to them.
(b) The details of merger (date of merger etc.) should be reported to the
Regional Office concerned of RBI / DBOD CO (in respect of branches in
Maharashtra & Goa) immediately after merger of the branch, and in any
case not later than two weeks after merger.
(c) After merger the licence of the merged branch (transferor branch) should
be surrendered to the Regional Office concerned of RBI / DBOD CO (in
respect of branches in Maharashtra & Goa) for cancellation.
14.2 Merger of Sole Rural/ Semi Urban Branch
As a matter of policy, merger of a sole rural branch / semi-urban branch
is not permitted, as merging the same with a branch outside the centre
would render the centre unbanked. However, under exceptional/
unforeseen circumstances (natural calamity, adverse law and order
condition), if the bank is compelled to merge any sole rural/ semi urban
branch, DCC approval should be obtained and proposal thereof should be
incuded in the annual plan for our consideration. Details of such proposals for
rural and semi urban branches are required to be furnished to us for our
approval as per proforma in Annex VIII.
14.3 Merger of Metropolitan, Urban and Semi Urban branches
Banks may merge one branch with another branch at Metropolitan, Urban and
Semi-urban centres (not assigned any responsibility under Government
sponsored programme), without seeking prior approval from RBI. As such
these proposals should not be included in the annual branch expansion plan
for our approval.
15. Closure of branches
15.1 General
(a) Banks should, ensure that customers of the branch, which is being closed
are informed well in time before actual closing of the branch so as to avoid
inconvenience to them.
(b) The details of closure (i.e. date of closure etc.) should be reported to the
Regional Office concerned of RBI / DBOD CO (in respect of branches in
Maharashtra & Goa) immediately after closure of the branch, and in any
case not later than two weeks after closure.
(c) After closure, the licence of the branch should be surrendered to the
Regional Office concerned of RBI / DBOD, CO (in respect of branches in
Maharashtra & Goa) for cancellation.
15.2 Closure of Rural branches
As a matter of policy, closure of even loss making branches at rural
centres having a single commercial bank branch (excluding Regional
Rural Bank branch) is not permitted, as closure would render the
centre unbanked. The proposal for closure of a rural branch at a centre
served by more than one commercial bank branch should be included in the
annual branch expansion plan after obtaining approval of District Consultative
Committee (DCC). Details of such proposals are required to be furnished to
us for our approval as per proforma in Annex IX.
15.3 Metropolitan, Urban and Semi Urban branches
Banks are permitted to close any branch in metropolitan, urban and semiurban
(not assigned responsibility under Government sponsored
programme) centres without seeking prior approval from RBI. As such these
proposals should not be included in the annual branch expansion plan for our
approval.
III. MISCELLANEOUS ASPECTS
16. Acquisition of premises - Opening of branches
Banks, while acquiring premises for opening of a branch should ensure that
the location of the branch complies with the local norms/ laws of Municipal
Corporation/ Nagarpalika/ Town area authority / Village Panchayat or any
other competent authority.
17. Population group-wise Classification of Centres
For the purpose of correct classification of a centre (city/ town/ village) i.e.
rural, semi urban, urban or metropolitan, the bank should mention correct
name of the revenue centre and not just the locality. For this purpose,
clarification can also be obtained from the Block Development Officer, Village
Panchayat, Tehsildar/ Municipality or Municipal Corporation Office/ Office of
the District Collector or District Census Authority. Further, banks may also
ascertain the population group-wise classification of the centre from the
Department of Statistical Analysis & Computer Services (DESACS), Reserve
Bank of India, Banking Statistics Division, C-8/9, Bandra-Kurla Complex,
Mumbai-400 051, before approaching DBOD CO with their annual branch
expansion plan proposals.
18. Reporting to Reserve Bank of India
(a) Reporting to Regional offices/ DBOD CO
Banks should report details of opening of a new place of business, closure,
merger, shifting or conversion of any existing place of business immediately
and in any case not later than two weeks after
opening/closer/merger/conversion etc. to the Regional Office concerned of
Reserve Bank of India, except in respect of branches in Maharashtra and
Goa, where it should be reported to DBOD CO, Mumbai.
The banks should also report the details of opening, closure and shifting of
call centres to the Regional Office concerned of Reserve Bank of India /
DBOD, CO (in respect of branches in Maharashtra & Goa).
(b) Branch Banking Statistics
Banks should submit within fourteen days of every quarter, information
relating to opening, closure, shifting and conversion of branches in Proformae
I & II (Annex X) to Department of Statistical Analysis and Computer Services,
(Banking Statistics Division) and the Regional Office concerned of RBI /
DBOD, CO. Further, information in respect of Authorised Dealer (AD)
branches should be submitted on an on going basis. A ‘Nil' statement must
be submitted in case there is nothing to report.
19. Foreign Banks
The branch authorization policy for Indian banks shall also be applicable to
foreign banks subject to the following:
 Foreign banks are required to bring an assigned capital of US$25
million up front at the time of opening the first branch in India.
 Existing foreign banks having only one branch would have to comply
with the above requirement before their request for opening of second
branch is considered.
 Foreign banks will be required to submit their branch expansion plan
on an annual basis.
 In addition to the parameters laid down for Indian banks the following
parameters would also be considered for foreign banks:
o Foreign bank’s and its group’s track record of compliance and
functioning in the global markets would be considered. Reports
from home country supervisors will be sought, wherever
necessary.
o Weightage would be given to even distribution of home
countries of foreign banks having presence in India.
o The treatment extended to Indian banks in the home country of
the applicant foreign bank would be considered.
o Due consideration would be given to the bilateral and diplomatic
relations between India and the home country.
o The branch expansion of foreign banks would be considered
keeping in view India’s commitments at W.T.O. ATMs would not
be included in the number of branches for such computation.
Accordingly, foreign banks should submit their annual branch expansion plan
to the Department of Banking Operations and Development, International
Banking Division, Central Office, Central Office Building(12th Floor), Shahid
Bhagat Singh Marg, Mumbai – 400 001.
Annex I
Annual Branch Expansion Plan
(FORM VI)
Form of application for permission to open a new place of business or
change the location (otherwise than within the same city, town or
village) of the existing place of business under Section 23 of the
Banking Regulation Act, 1949 - Banking Regulation (Companies) Rules
1949 Rule 12 Form VI
Address .................
Date ......................
........................................
Department of Banking Operations and Development
Reserve Bank of India
.............................
Dear Sir,
We hereby apply for permission to * open a new place of business / change
the location at .................. of an existing place of business from ................
to ................ in terms of section 23 of the Banking Regulation Act, 1949. We
give below the necessary information in the form prescribed for the purpose.
Yours faithfully,
Signature ................
1. Name of the Banking Company
2. Proposed Office
(Give the following information)
(a) Name of city/town/village:
(in case the place is known by
more than one name, the relative
information should also be furnished)
(b) Name of the locality/location:
(c) Name of i) Block
ii) Tehsil :
iii)District :
iv) State / Taluka :
(d) Status of the proposed office :
(e) The distance between the proposed
office and the nearest existing
commercial bank office together
with the name of the bank and
that of the centre/locality:
@(f) Name of the Commercial banks and the
number of their offices functioning within the radius of 5 kms.
together with the names of centres where these are
functioning :
3. Previous application:
(Give particulars of applications
if any previously made to the
Reserve Bank in respect of the
proposed place of business)
4. Reasons for the proposed office:
(State detailed reasons for the
proposed office and give statistics
and other data, as under, which may
have been collected for the proposed
office)
(i) Population of the place:
@(ii) Particulars of the command
area (i.e. the area of the
operation of the proposed
office):
(a) Approximate radius of
the command area :
(b) Population :
(c) Number of villages in
the command area :
iii) The volume and value of the agricultural, mineral and
industrial production and imports and exports in the
area of operation of the proposed office as under:
Commodity Production Imports Exports
Volume Value Volume Value Volume Value
(1) (2) (3) (4) (5) (6) (7)
(iv) If there are schemes for agricultural,
mineral or industrial development, give
details of the same and their probable
effects on the volume and value of the
present production, imports and exports.
(v) If the existing banking facilities are
considered inadequate, give reasons :
(vi) Prospects: Give as under, an estimate of
minimum business which the banking
company expect to attract at the proposed
place of business within 12 months:
a) Deposits : Amount in thousands of rupees.
b) Advance : Amount in thousands of rupees.
5. Change of location of an existing office
(Give the exact location of the office
which is proposed to be closed and
of the place where it is proposed to
be shifted giving particulars of the
new location as in Item 2,3, & 4)
6. Expenditure:
(State the amount already spent
or proposed to be spent on staff,
premises, furniture, stationery,
advertising etc. in connection
with the proposed office. Also
state the minimum income which
the banking company expects to
earn at the proposed office
within 12 months)
*Estimate of annual
Expenditure
a) Establishment Rs.
Charges
b) Stationery & Rs.
Miscellaneous
c) Rent & Bldg. Rs.
d) Interest to be Rs.
paid on deposits
e) Interest on funds
borrowed from
H.O.on Rs.___@___% Rs.
TOTAL Rs.
Estimated annual Income :
a) Interest on advances Rs.
b) Commission Rs.
c) Exchange Rs.
d) Interest on funds lent to H.O. Rs.
TOTAL : Rs.
Estimated Profits Rs.
7. Other particulars:
(Any additional facts which the banking company
may wish to add in support of its application)
* The portion not applicable to be struck off.
@ The information need be furnished only in the case of application for
centres with a population of less than one lakh.
NB : 1. The words 'office' and 'offices', wherever they occur in this Form, include a
place or places of business at which deposits are received, cheques cashed, monies
lent or any other form of business referred to in sub-section (1) of section 6 of the Act
is transacted.
2. Item (5) to be replied to if the application is for changing the location of an existing
place of business.
3. If a banking company is unable or unwilling to supply full details in respect of any
of the items, reasons for the omission may be given.
4. The information asked for in items (2), (3), (4), (5) and (6) is to be given separately
for each office where the application relates to the opening of or changing the
location of more than one office.
5. In the case of change of the location of "administrative office" where no banking
business is transacted or proposed to be transacted (such as Registered Office,
Central Office or Head Office) only an application in the form of a letter need be
submitted, indicating the reasons for the change.
Annex II
Annual Branch Expansion Plan
Name of the bank:-
Summary of branches, proposed to be opened
* Centre (city/ town/ village) name should be given (like Mumbai, Bangalore,
Nashik) not the locality. In case more than one branch is proposed at a
centre, locality may be mentioned, like Mumbai-Fort, Mumbai- Bandra etc.
NB: The summary of branches is required to to be submitted in bilingual
format (Hindi and English) with a soft copy thereof in "Akruti Office Priya
Expand" font.
Sr.
no.
Centre/
Place
District State Category
of Branch
(Gen/Spl)
Population
of the
centre
Population
Groupwise
Classificati
on
Underbanked
district or
Otherwise
Annex III
Annual Branch Expansion Plan
Name of the bank: -
Summary of Non branch / Off site ATMs proposed to be opened
Sr.No. Centre/
Place
District State Population
of the
centre
Population
Group-wise
Classification
Underbanked
district or
Otherwise
* Centre (city/ town/ village) name should be given (like Mumbai, Bangalore,
Nashik) not the locality. In case more than one branch is proposed at a
centre, locality may be mentioned, like Mumbai-Fort, Mumbai- Bandra etc.
NB: The summary of branches is required to to be submitted in bilingual
format (Hindi and English) with a soft copy thereof in "Akruti Office Priya
Expand" font.
Annex IV (A)
Annual Branch Expansion Plan
Name of the bank: -
(i) State wise, population group wise number of existing branches in
'Underbanked' districts
(Position as on )
Sr.
No.
State Number of branches
Percentage of
rural branches to
total branches
Rural Semi
urban
Urban Metropolitan Total
(ii)State wise, population group-wise number of existing branches in
'Other than underbanked' districts
(Position as on )
Sr.
No.
State Number of branches
Percentage of
rural branches to
total branches
Rural Semi
urban
Urban Metropolitan Total
Annex IV(A)
(iii) Existing population category wise branches of the bank:
(All-India summary position)
(Position as on )
Rural Semi-urban Urban Metropolitan Total
No. of
branches
% to
total
No. of
branches
% to
total
No. of
branches
% to
total
No. of
branches
% to
total
No. of
branches
Underbanked Districts:
Districts other than Underbanked:
Grand Total:
Annex IV (B)
Annual Branch Expansion Plan
Name of the bank: -
(i) State wise, population group wise number of existing ATMs
'Underbanked' districts
(Position as on)
Sr.
No.
State Number of On-site ATMs Number of off-site ATMs
Rural Semi
Urban
Urban Metro Total Rural Semi
Urban
Urban Metro Total Grand
Total
(ii)State wise, population group wise number of existing ATMs
'Other than underbanked' districts
(Position as on )
Sr.
No.
State Number of On-site ATMs Number of off-site ATMs
Rural Semi
Urban
Urban Metro Total Rural Semi
Urban
Urban Metro Total Grand
Total
(ii) Existing off-site ATMs of the bank:
(All-India summary position)
(Position as on)
Rural Semi-urban Urban Metropolitan
No. of
ATMs
% to
total
No. of
ATMs
% to
total
No. of
ATMs
% to
total
No. of
ATMs
% to
total
No. of
ATMs
Underbanked Districts:
Districts other than Underbanked:
Grand Total:
Annex IV (C)
Annual Branch Expansion Plan
Name of the bank: -
(i) State wise, population group wise number of existing Extension
Counters (ECs)
(Position as on )
Sr.
No.
State Number of existing Extension Counters
Rural Semi
Urban
Urban Metro Total Remarks
(ii) State wise, population group wise number of Extension Counters
upgraded into full fledged branches during the year
(Position as on )
Sr.
No.
State Number of Extension Counters upgraded
into full fledged branches
Rural Semi
Urban
Urban Metro Total Remarks
Annex IV (D)
Annual Branch Expansion Plan
Name of the bank:-
Information to be submitted along with Annual Branch Expansion Plan
1) Medium Term Policy for Branch Expansion Programme of the Bank:
Bank may furnish details of the proposed Medium Term Policy for its branch
expansion inclusive of branches & ATMs for a period of 3 years
2) Expected level of business in the next 3 yearsa.
Deposits
b. Advances
3) Expected customer base in the next 3 years
4) Technology implementation:
a. No. of branches fully computerized
b. No. of branches with network connectivity
c. No. of branches with Core Banking Solution (CBS)
The bank may also submit a brief write-up on the existing technological
infrastructure, various technology initiatives undertaken and the proposed
enhancement/ upgradation of technology for achieving its business goals in
the medium term
5) Measures to promote financial inclusion:
The bank may furnish details of the various levels/ slabs of minimum balance
required to be maintained by customers and the related services offered by
the bank linked to such multiple levels/ slabs of minimum balance.
6) Schedule of Charges of Products & Services offered:
The bank may forward the Schedule of Charges for various products and
services offered to its customers. Minimum balance required for opening of
various accounts, charges for non-maintenance of minimum balance etc.
7) Steps proposed to be taken by the bank to ensure that the quality of
customer service does not get adversely affected due to expansion of branch
network.
8) Number of complaints received by the bank during last two years
Sr.No. Year No. of Complaints
Received
No. of Complaints
Disposed
Pending
9) Measures proposed by the bank to address the following issues arising out
of scaling up of operations due to the proposed expansion of branch network.
 Internal control and audit
 Housekeeping and reconciliation
 Other areas of operational risk
 HR issues
10) Position regarding priority sector advances.
Sector wise break up may be furnished by the bank.
11) Details relating to Credit Deposit Ratio:
(Position as on) (Amt. in Rs. crore)
Particulars Rural Semi-urban Urban Metropolitan Total
Deposits
Advances
Credit-deposit ratio
Deposits per branch
Advances per branch
12) The activities of the banking group and the nature of relationship of the
bank with its subsidiaries, affiliates and associates.
13) Whether any show-cause notice was issued to the bank and whether any
penalty was imposed on the bank during the last one year. If so, the details
thereof.
14) List of Branches opened by the bank during the previous one year.
Sl.No. Reference No.
of DBOD and
date
Serial
No. in
Annex
Centre District State Date of
opening
15) List of authorisations for opening of branches, pending with the bank for
utilization.
Sl.No. Reference No.
of DBOD and
date
Serial
No. in
Annex
Centre District State Remarks
16) Number authorizations pending with the bank for operationalisation of
Off Site ATMs.
17) Any other information bank may like to furnish.
Annex V
List of Underbanked Districts (based on 2001 Population census)
ANDHRA PRADESH ASSAM
1. ADILABAD 16. MORIGAON
2. ANANTAPUR 17. NAGAON
3. CUDDAPAH 18. NALBARI
4. KARIMNAGAR 19. SIBSAGAR
5. KHAMMAM 20. SONITPUR
6. KURNOOL 21. TINSUKIA
7. MAHBUBNAGAR BIHAR
8. MEDAK 1. ARARIA
9. NALGONDA 2. AURANGABAD
10. RANGAREDDY 3. BANKA
11. SRIKAKULAM 4. BEGUSARAI
12. VIZIANAGARAM 5. BHAGALPUR
13. WARANGAL 6. BHOJPUR
7. BUXAR
ARUNACHAL
PRADESH
8.
DARBHANGA
1. CHUNGLANG 9. GAYA
2. DIBANG VALLEY 10. GOPALGANJ
3. EAST KAMENG 11. JAMUI
4. LOHIT 12. JEHANABAD
5. LOWER SUBANSIRI 13. KAIMUR
6. TIRAP 14. KATIHAR
7. UPPER SIANG 15. KHAGARIA
8. UPPER SUBANSIRI 16. KISHANGANJ
ASSAM 17. LAKHISARAI
1. BARPETA 18. MADHEPURA
2. BONGAIGAON 19. MADHUBANI
3. CACHAR 20. MUNGER
4. DARRANG 21. MUZAFFARPUR
5. DHEMAJI 22. NALANDA
6. DHUBRI 23. NAWADA
7. DIBRUGARH 24. PASCHIMI CHAMPARAN
8. GOALPARA 25. PURBI CHAMPARAN
9. GOLAGHAT 26. PURNIA
10. HAILAKANDI 27. ROHTAS
11. JORHAT 28. SAHARSA
12. KARBI ANGLONG 29. SAMASTIPUR
13. KARIMGANJ 30. SARAN
14. KAKROJHAR 31. SHEIKHPURA
15. LAKHIMPUR 32. SHEOHAR
BIHAR JAMMU & KASHMIR
33. SITAMARHI 1. ANANTNAG
34. SIWAN 2. DODA
35. SUPAUL 3. KUPWARA
36. VAISHALI 4. POONCH
CHHATTISGARH JHARKHAND
1. BASTAR 1. BOKARO
2. BILASPUR 2. CHATRA
3. DANTEWADA 3. DEOGHAR
4. DHAMTARI 4. DHANBAD
5. DURG 5. DUMKA
6. JANJGIR-CHAMPA 6. GARHWA
7. JASHPUR 7. GIRIDIH
8. KANKER 8. GODDA
9. KAWARDHA 9. GUMLA
10. KORBA 10. HAZARIBAG
11. KORIA 11. KODERMA
12. MAHASAMUND 12. LOHARDAGGA
13. RAIGARH 13. PAKUR
14. RAIPUR 14. PALAMAU
15. RAJNANDGAON 15. PASCHIMI SINGHBHUM
16. SURGUJA 16. SAHEBGANJ
DADRA & NAGAR
HAVELI
KARNATAKA
1. DADRA & NAGAR HAVELI 1. BANGALORE RURAL
GUJARAT 2. BIDAR
1. AMRELI 3. CHAMARAJANAGAR
2. BANAS KANTHA 4. GULBARGA
3. BHAVNAGAR 5. KOPPAL
4. DAHOD 6. RAICHUR
5. JUNAGADH KERALA
6. NARMADA 1. MALAPPURAM
7. PANCH MAHALS MADHYA PRADESH
8. PATAN 1. BALAGHAT
9. SABAR KANTHA 2. BARWANI
10. SURAT 3. BETUL
11. SURENDRANAGAR 4. BHIND
12. DANGS 5. CHHATARPUR
HARYANA 6. CHHINDWARA
1. FATEHABAD 7. DAMOH
2. JHAJJAR 8. DATIA
3. JIND 9. DEWAS
4. KAITHAL 10. DHAR
5. MAHENDRAGARH 11. DINDORI
MADHYA PRADESH MAHARASHTRA
12. EAST NIMAR 13. JALNA
13. GUNA 14. KOLHAPUR
14. HARDA 15. LATUR
15. HOSHANGABAD 16. NANDED
16. JHABUA 17. NANDURBAR
17. KATNI 18. NASIK
18. MANDLA 19. OSMANABAD
19. MANDSAUR 20. PARBHANI
20. MORENA 21. SATARA
21. NARSIMHAPUR 22. SOLAPUR
22. NEEMUCH 23. THANE
23. PANNA 24. WARDHA
24. RAISEN 25. WASHIM
25. RAJGARH 26. YAVATMAL
26. RATLAM MANIPUR
27. REWA 1. BISHNUPUR
28. SAGAR 2. CHANDEL
29. SATNA 3. CHURACHANDPUR
30. SEHORE 4. IMPHAL EAST
31. SEONI 5. IMPHAL WEST
32. SHAHDOL 6. TAMENGLONG
33. SHAJAPUR 7. THOUBAL
34. SHEOPUR 8. UKHRUL
35. SHIVPURI MEGHALAYA
36. SIDHI 1. EAST GARO HILLS
37. TIKAMGARH 2. SOUTH GARO HILLS
38. UJJAIN 3. WEST GARO HILLS
39. UMARIA MIZORAM
40. VIDISHA 1. LAWNGTLAI
41. WEST NIMAR 2. SAIHA
MAHARASHTRA NAGALAND
1. AHMADNAGAR 1. DIMAPUR
2. AKOLA 2. KOHIMA
3. AMRAVATI 3. MOKOKCHUNG
4. AURANGABAD 4. MON
5. BHANDARA 5. PHEK
6. BID 6. TUENSANG
7. BULDHANA 7. WOKHA
8. DHULE 8. ZUNHEBOTO
9. GADCHIROLI ORISSA
10. GONDIA 1. ANGUL
11. HINGOLI 2. BALANGIR
12. JALGAON 3. BALESHWAR
ORISSA RAJASTHAN
4. BARGARH 18. KARAULI
5. BHADRAK 19. NAGAUR
6. BOUDH 20. PALI
7. DHENKANAL 21. RAJSAMAND
8. GAJAPATI 22. SAWAI MADHOPUR
9. GANJAM 23. SIKAR
10. JAJPUR 24. TONK
11. KALAHANDI 25. UDAIPUR
12. KANDHAMAL SIKKIM
13. KENDRAPARA 1. WEST SIKKIM
14. KEONJHAR TAMIL NADU
15. KORAPUT 1. CUDDALORE
16. MALKANGIRI 2. DHARMAPURI
17. MAYURBHANJ 3. KANCHEEPURAM
18. NABARANGPUR 4. NAGAPATTINAM
19. NAYAGARH 5. PERAMBALUR
20. NAWAPARA 6. PUDUKKOTTAI
21. PURI 7. RAMANATHAPURAM
22. RAYAGADA 8. SALEM
23. SONEPUR 9. THIRUVALLUR
24. SUNDARGARH 10. THIRUVARUR
PONDICHERRY 11. TIRUVANNAMALAI
1. YANAM 12. VELLORE
PUNJAB 13. VILLUPURAM
1. MANSA
RAJASTHAN TRIPURA
1. ALWAR 1. DHALAI
2. BANSWARA 2. NORTH TRIPURA
3. BARAN 3. SOUTH TRIPURA
4. BARMER 4. WEST TRIPURA
5. BHARATPUR UTTAR PRADESH
6. BHILWARA 1. AGRA
7. BUNDI 2. ALIGARH
8. CHITTAURGARH 3. ALLAHABAD
9. CHURU 4. AMBEDKAR NAGAR
10. DAUSA 5. AURAIYA
11. DHOLPUR 6. AZAMGARH
12. DUNGARPUR 7. BAGHPAT
13. HANUMANGARH 8. BAHRAICH
14. JALOR 9. BALLIA
15. JHALAWAR 10. BALRAMPUR
16. JHUNJHUNU 11. BANDA
17. JODHPUR 12. BARA BANKI
UTTAR PRADESH UTTAR PRADESH
13. BAREILLY 56. SANT RAVIDAS NAGAR
14. BASTI 57. SHAHJAHANPUR
15. BIJNOR 58. SHRAVASTI
16. BUDAUN 59. SIDHARTHANAGAR
17. BULANDSHAHR 60. SITAPUR
18. CHANDAULI 61. SONBHADRA
19. CHITRAKOOT 62. SULTANPUR
20. DEORIA 63. UNNAO
21. ETAH WEST BENGAL
22. ETAWAH 1. BANKURA
23. FAIZABAD 2. BARDDHAMAN
24. FARRUKHABAD 3. BIRBHUM
25. FATEHPUR 4. DAKSHIN DINAJPUR
26. FIROZABAD 5. HAORA
27. GHAZIPUR 6. HUGLI
28. GONDA 7. JALPAIGURI
29. GORAKHPUR 8. KOCH BIHAR
30. HAMIRPUR 9. MALDAH
31. HARDOI 10. MEDINIPUR
32. HATHRAS 11. MURSHIDABAD
33. JALAUN 12. NADIA
34. JAUNPUR 13. NORTH 24 PARGANAS
35. JHANSI 14. PURULIYA
36. JYOTIBA PHULE NAGAR 15. SOUTH 24 PARGANAS
37. KANAUJ 16. UTTAR DINAJPUR
38. KAUSHAMBI
39. KHERI
40. KUSHI NAGAR
41. LALITPUR
42. MAHARAJGANJ
43. MAHOBA
44. MAINPURI
45. MATHURA
46. MAU
47. MIRZAPUR
48. MORADABAD
49. MUZAFFARNAGAR
50. PILIBHIT
51. PRATAPGARH
52. RAI BARELI
53. RAMPUR
54. SAHARANPUR
55. SANT KABIR NAGAR
Annex VI
Annual Branch Expansion Plan
Name of the bank: -
Proposal for shifting of branches from one centre to another centre
Sr.
No
.
Name of
branch
(centre /
place)
District State Name of
the other
Bank’s
branch at
the
centre
Proposed
to shift to
(centre
name)
Distance
between
two
centres
Branch
making
losses for
how
many
years
Reasons
for
shifting
Whether
DCC
approval
obtained
Rem
arks
Annex VII
Annual Branch Expansion Plan
Name of the bank: -
Proposal for conversion of General Branches into Specialised Branches
Sr.
No.
Name of
General
branch to
be
converted
(centre /
place)
Population
Category of
the branch
District State Proposed
Type of
Specialised
Branch
Reasons
for
Conversion
How existing
customers
would be
served after
conversion
Rem
arks
Annex VIII
Annual Branch Expansion Plan
Name of the bank: -
Proposal for merger of branches
Sr.
No
.
Name of
branch
(centre /
place)
Populati
on
categor
y of the
branch
Distri
ct
State Name of
the other
Bank’s
branch at
the centre
Proposed
to merge
with
(name of
branch)
Distance
between
two
branches
Reasons
for
merger
Whether
DCC
approval
obtained
wherever
required
Rem
arks
 DCC approval is also required to be obtained for semi urban
branches assigned responsibility under Government sponsored
programme
Annex IX
Annual Branch Expansion Plan
Name of the bank: -
Proposal for closure of branches
Sr.
No.
Name
of
branch
to be
closed
(centre
/ place)
Population
category of
the branch
District State Name of
the other
Bank’s
branch at
the centre
Reasons
for
Closure
Whether
DCC
approval
obtained
wherever
required
Remarks
 DCC approval is also required to be obtained for semi urban
branches assigned responsibility under Government sponsored
programme
Annex X
Annual Branch Expansion Plan
PROFORMA - I
Statement of New Branch/office/NAIO as and when opened:
(Please read the Instructions before filling the proformae–I&II)
Items
1.(a) Name of the Commercial Bank/Other Financial Institution/ Co-operative
institution:___________________
(b) Proforma for:
Branch/Office of a Bank ( )
Not Administratively Independent Office (NAIO) ( )
Branch/Office of Other Financial Institution ( )
(Put tick mark () in appropriate box)
(c)Uniform Codes: Part-I(7/9 digits):
See Instructions I, II,III; see Explanations also) (For NAIOs)
Part-II (7 digits):
(To be allotted by RBI)
(See Instructions I, II,III; see Explanations also)
2. (a) Name of the new branch/office/NAIO
(b) RBI Reference No._______________
and Reference Date: / /
Day Month Year
(c) Licence (Authorisation) Number:_______________
(as obtained from RBI)
(d) Date of Licence (Authorisation): / /
(See explanation) Day Month Year
(e) Whether it is a case of Re-Validation of licence (authorisation):
Yes ( ) No ( )
If yes, give the date of re-validation(See explanation):
/ /
Day Month Year
3. Date of opening of the / /
New Branch/office/NAIO: Day Month Year
4. Postal address:
4.1 Name/Municipal Number of
the building (if any): ______________________________
4.2 Name of the Road (if any): __________________________
4.3 (a) Name of the Post Office: ________________________
(b) Pin Code:
4.4 Name of the locality within a
Centre (Revenue unit): _____________________________
(See explanation)
4.5 Name of Tehsil/Taluka/Sub-Division: _________________
4.6 Tel.No. /Telex No. (Including STD code): ____________
4.7 Fax No.: ________________
4.8 E-mail Address: _____________________
5.(a)Name of the centre(revenue village/town/city/
Municipality/Municipal Corporation) within
the limits of which branch/office is located: ______________
(This is a very important aspect: please see explanation)
(b) Name of Community Development Block/Development Block/Tehsil/
Taluka/Sub-Division/Mandal/Police Station:______________________
(c) Name of the District: _____________________
(d) Name of the State: ____________________
(e) Population of the Centre (revenue unit)
as per latest Census report: ________________
(See explanation)
6. Is/are there any other administratively
independent bank branch(es)/office(s) other
than your branch/office/NAIO in your center: Yes: ( ) No: ( )
(See explanation and put tick mark () in appropriate box)
7. (a) Business Status of the new branch/office/NAIO (See explanation):
Code: Status Name:- ______________________
(b) In case of NAIO, supply the following details (See explanation):
(i) Name of the base branch/office: ____________________
(ii) Uniform code numbers of the base branch/office
Part-I (7 digits):
Part-II(7 digits):
8.(i)(a) Status of Central Government Business:
(Put tick mark () in appropriate box)
Type of Central Government Business
(1) ( ) No Govt. Business
(2) ( ) Direct Taxes
(3) ( ) Departmentalised Ministries Account (DMA)
(4) ( ) Pension
(5) ( ) Bond Issue
(6) ( ) Others (Specify, if any):________________
(b) Status of State Government Business (i.e. Treasury/Subtreasury
business):(Put tick mark () in appropriate box)
Type of Treasury/Sub-Treasury Business (State Govt.)
(1) ( ) No Govt. Business
(2) ( ) Treasury Business
(3) ( ) Sub-Treasury Business
(4) ( ) Pension
(5) ( ) Bond Issue
(6) ( ) Others (Specify, if any):________________
(ii) Whether a currency chest is
attached to this branch/office: Yes ( ) No ( )
(A) If “Yes” then state:
(a) The type of currency chest: A( ) B( ) C( )
(put a tick mark () in appropriate box)
(b) Date of establishment / /
of currency chest: Day Month Year
(c) Currency chest code Number:
(8- digit Code allotted by Department of Currency
Management (DCM) is to be written)
(d) Mention type of area in which currency chest is
located:
(State “type of area” code: See the explanation)
Code: Type of Area: ________________
(B) If “NO” then, supply particulars of the nearest
branch/office having currency chest facility:
(a) Bank Name: ____________________
(b) Branch Name: ______________________
(c) Part-I of Uniform code:
(d) Distance (in Km.): ______________
(e) Centre Name: ____________________
(iii) Whether there is a repository
attached to this branch/office? Yes ( ) No ( )
(put a tick mark () in appropriate box)
(iv) Whether a small coin-depot is
attached to this branch/office? Yes ( ) No ( )
(Put a tick mark () in appropriate box)
(v) Whether any NAIO is attached to the branch having Currency
Chest/Repository/Small Coin-depot facility?
(Put a tick mark () in appropriate box)
Yes ( ) No ( )
9. Nature of Business conducted by the branch/office/NAIO:
(Put tick mark () in appropriate box/boxes)
Name
(1) ( ) Banking Business
(2) ( ) Merchant Banking Business
(3) ( ) Foreign Exchange
(4) ( ) Gold deposit
(5) ( ) Insurance
(6) ( ) Administrative/Controlling Office
(7) ( ) Training Centre
(8) ( ) others(please specify, if any)---------
10. (a) Authorised Dealer Category
of the branch/office: A ( ) B ( ) C ( )
(Put a tick mark () in appropriate box)
(b) Date of Authorisation: / /
Day Month Year
(c) In the case of ‘C’ Category office, write name and
uniform code numbers of `A’ or `B’ Category
branch/office through which its foreign exchange
transactions are settled:
(i) Name of the branch/office: _____________________
(ii)Uniform code Numbers of the branch/office:
Part-I : Part-II:
(7 digits) (7 digits)
11. Technological facility of Branch/Office:
(Put tick mark () in appropriate box)
Technological Facility
(1) ( ) Not yet Computerised
(2) ( ) Partially Computerised
(3) ( ) Fully Computerised
12. Communication Facility available in the Branch/Office/NAIO:
(Put tick mark () in appropriate box)
Communication Facility
(1) ( ) NO NETWORK
(2) ( ) INFINET
(3) ( ) INTERNET
(4) ( ) INTRANET
(5) ( ) CORE BANKING SOLUTION
(6) ( ) Others (Please specify, if any)_____________
13. Magnetic Ink Code Reader
(MICR Code) number of the branch/office/NAIO: _____________________
14. Any other particulars (please specify): _______________
15. For RBI use only:
(a) AD Region Office Code:
(b) Census Classification Code:
(c) Full Postal Address:
PROFORMA- II
Statement of change in Status/Merger/Conversion/Closure etc. of Existing
Branch/office/NAIO as and when effected.
(Please read all Instructions and explanations before filling the proforma. The
explanatory notes provided in brackets against various items in Proforma – II relate
to the item numbers in Proforma – I shown under “EXPLANATIONS OF ITEMS IN
PROFORMA – I” enclosed)
Name of the Bank/Other Financial Institution/Co-operative institution:-
______________________________________________
A. Change in Status/ A.D.Category/Nature of Business/Postal address
of Branch/office/NAIO:
1. Name of the branch/office/NAIO (See explanation in item no.2(a)):
(a) Old Name: __________________
(b) Current Name: ____________________________
(c) Date of Change in Name: / /
Day Month Year
2. Uniform Code (Existing):
(a) Part-I (7/9 digits):
(b) Part-II (7 digits) :
3. Change in Business status of the Branch/office/NAIO (See explanation in item
no.7(a)):
(a) Old Status Name: _________________________ Code:
(b) Current Status Name: _____________________ Code:
(c) Date of Change in status (if any): / /
Day Month Year
4. Change in Nature of Business:
(Put tick mark () in appropriate box)
(a) Old Name Current
(1) ( ) Banking Business ( )
(2) ( ) Merchant Banking Business ( )
(3) ( ) Foreign Exchange ( )
(4) ( ) Gold deposit ( )
(5) ( ) Insurance ( )
(6) ( ) Administrative/Controlling Office ( )
(7) ( ) Training Centre ( )
(8) ( ) Others (Please specify, if any) ( )
(b Date of Change in nature of business(if any): / /
Day Month Year
5.(a) Change in Technological Facility of the Branch/office/NAIO:
(Put tick mark () in appropriate box)
Old Technological Facility Current
(1) ( ) Not yet Computerised ( )
(2) ( ) Partially Computerised ( )
(3) ( ) Fully Computerised ( )
(b) Date of Change in technological Facility:
/ /
Day Month Year
6. (a) Communication Facility of Branch/Office/NAIO:
(Put tick mark () in appropriate box)
Old Communication Facility Current
(1) ( ) NO NETWORK ( )
(2) ( ) INFINET ( )
(3) ( ) INTERNET ( )
(4) ( ) INTRANET ( )
(5) ( ) CORE BANKING SOLUTION ( )
(5) ( ) Others ( )
(Please specify, if any)______________
Date of Change in Communication Facility: / /
Day Month Year
7. State Authorised Dealer Category of the Branch/office:
a) Old Category : _________________________
b) New/Changed Category : _________________________
Further, put tick mark () in appropriate box :
Upgraded ( ) Degraded ( ) Newly Authorised ( )
c) Date of Upgradation/Degradation/ Authorisation:
/ /
Day Month Year
d) If a branch doing general banking business is assigned additional responsibility
of handling foreign exchange business and belongs to AD Category “C”,
then give uniform code number of the Link Branch/office through which its
transactions are reported:
Part-I(7 digits):
Part-II(7 digits):
e) If a link office of an existing “C” category branch is changed, then provide
Part-I & II codes of the new link office:
Part-I(7 digits):
Part-II(7 digits):
f) If “A”/”B” category AD branch is downgraded to “C” category, then give uniform
code number of the Link Branch/office through which the transactions of
the downgraded “C” category AD branch is reported:
Part-I(7 digits):
Part-II(7 digits):
g) If ‘A’/’B’ category AD branch, which has been working as a link office to one
or more ‘C’ category AD branch(es), is downgraded to “C” category AD
branch, then provide Part – I code(s) of the AD branch(es) which has/have
been assigned the link office role to the said ‘C’ category branch(es):
UCN of ‘C’ category branch UCN of Link office
Part - I: Part - I:
Part - I: Part - I:
Part - I: Part - I:
(If the list of “C” category branches is large, then enclose the list)
h) If a branch doing general banking business alone/“C” category AD branch
is assigned or upgraded to “A”/”B” category AD branch, then part-I code of
all “C” category branches, which will be linked to the newly upgraded AD
branch should be listed:
Part-I(7 digits):
Part-I(7 digits):
Part-I(7 digits):
(If the list of “C” category branches is large, then enclose the list)
8. Details in respect of change, if any, in the status of currency chest/ repository/ coindepot/
Govt. business, etc. (including opening/ shifting/ conversion/ closure). In all these
cases of shifting/conversion/ closure please mention the date also:
(a) (i) Central Government Business:
(Put tick mark () in appropriate box)
Old Type of Govt. Business New
(1) ( ) No Govt. Business ( )
(2) ( ) Direct Taxes ( )
(3) ( ) Departmentalised Ministries Account(DMA) ( )
(4) ( ) Pension ( )
(5) ( ) Bond Issue ( )
(6) ( ) Others (specify, if any):_________ ( )
(ii) Date of Change: / /
Day Month Year
(b) (i) Treasury/ Sub-Treasury Business (State Govt. Business):
(Put tick mark () in appropriate box)
Old Type of Treasury/Sub-Treasury Business New
(1) ( ) No Govt. Business ( )
(2) ( ) Treasury Business ( )
(3) ( ) Sub-Treasury Business ( )
(4) ( ) Pension ( )
(5) ( ) Bond Issue ( )
(6) ( ) Others (Specify, if any):_________ ( )
(ii) Date of Change: / /
Day Month Year
(c) State Currency Chest Type:
Old: ( ) Current: ( )
Date of Change: / /
Day Month Year
(d) If authorised newly for currency chest, then indicate
(i) type of currency chest (put tick () mark in appropriate box):
A ( ) B ( ) C ( )
(ii) Date of authorisation: / /
Day Month Year
(iii) Currency chest code Number:
(8- digit Code allotted by Department of Currency
Management (DCM) is to be written)
(iv) Mention type of area in which currency chest is located
(State “type of area” code: See the explanation)
Code: Type of Area: ________________
(e) Repository: ______________________
(f) Coin-Depot: ______________________
9. Full postal address:(See explanations in item nos. 4.1 to 4.8)
(i) Old
(a) Name/Municipal Number of the building (if any): ____________
(b) Name of the Road (if any): ________________
(c) (i)Name of the Post Office: _________________
(ii) Pin Code:
(d) Name of the locality within the Centre (Revenue unit): ______
(e) Name of the Centre (Revenue unit): _________________
(f) Name of Community Development Block/Development
Block/Tehsil/Taluka/Sub-Division/
Mandal/Police Station:_______________
(g) Tel.No. /Telex No. (Including STD code): ____________
(h) Fax No.: ______________________
(i) E-mail Address: _____________________
(ii) Current
(a) Name/Municipal Number of the building (if any): ______
(b) Name of the Road (if any): ____________________
(c) (i) Name of the Post Office: _______________________
(ii) Pin Code:
(d) Name of the locality within the Centre (Revenue unit):________
(e) Name of the Centre (Revenue unit): _________________
(f) Name of Community Development Block/Development
Block/Tehsil/Taluka/Sub-Division/ Mandal/Police
Station:___________________
(g) Tel.No. /Telex No. (Including STD code): _____________
(h) Fax No.: ______________________
(i) E-mail Address: ____________________
(iii) Date of change of address: / /
Day Month Year
10. (i) If the branch/office/NAIO is relocated to a different centre (revenue unit)
furnish details of the current centre:
(See explanations in item nos.2(a),5(a),5(b)and 5(e) for
(a),(b),(c)and (f) respectively)
a) Branch/Office/NAIO Name: _____________________________
b) Revenue Unit (Centre Name): _______________________
c) Name of Community Development Block/Development
Block/Tehsil/Taluka/Sub-Division/
Mandal/Police Station:_______________
d) District Name: ______________________________
e) State Name: ______________________________
f) Population (as per latest Census) of the Centre: __________
(ii) Date of change of centre: / /
Day Month Year
11. If the branch/office/NAIO is relocated to a different centre, give the reasons
for relocation:__________________________
(a) Licence No.:__________________
(b) Licence suitably amended on / /
Day Month Year
by RBI Regional Offices at __________________________
(c) Ref. No.& Date of RBI Central Office’s approval:
Ref. No.: _________________ Date: / /
Day Month Year
12. In case of change/closure of base branch/office of an NAIO provide:
(a) Part–I code of old base branch/office:
(b) Part–I code of new base branch/office:
13. Any other particulars: __________________________________
B. Closure/ Merger/Conversion of the Branch/Office/NAIO:
1. Advice for Closure ( ) Merger( ) Conversion( )
(Put tick mark () against appropriate box)
2. Branch/Office/NAIO Name (See explanation in item no.2(a)): ___________
3. Uniform Codes (See explanation in item no.1(b)):
Part-I: Part - II:
4. (a)Postal address of branch/office/NAIO:
(See explanation in item nos. 4.1 to 4.8)
(i) Name/Municipal Number of the building (if any): _____
(ii) Name of the Road (if any): _______________________
(iii) (A) Name of the Post Office: ______________________
(B) Pin Code:
(iv) Name of the locality within the Centre (Revenue unit): ______
(v) Name of Community Development Block/Development Block/Tehsil/
Taluka/Sub-Division/Mandal/Police Station:_________________
(vi) Tel.No. /Telex No. (Including STD code): ____________
(vii) Fax No.: _________________
(viii) E-mail Address: __________________________
(b) Centre Name: ___________________________
(See explanation in item no.5(a))
(c) District Name:______________________
(d) State Name: ________________________
(e) Population of the centre (revenue unit) as per latest Census Report:_____
(See explanation in item no.5(e))
5. Date of Closure/Merger/Conversion: / /
Day Month Year
6. RBI reference No. & date of approval:
Reference No.: _________________ Date: / /
Day Month Year
7. Reason for Closure/Merger/Conversion: ______________________
8. Licence surrendered for ______________ on / /
(Name of branch/office/NAIO) Day Month Year
to RBI Regional Office at _________________________________
9. In case of closure/merger of ‘A’/’B’ category AD branch, which has been working as a link
office to one or more ‘C’ category AD branch(es), provide Part – I code of the AD
branch(es) which has/have been assigned the link office role to the said ‘C’ category
branch(es):
UCN of ‘C’ category branch UCN of Link office
Part - I: Part - I:
Part - I: Part - I:
Part - I: Part - I:
(If the list of “C” category branches is large, then enclose the list)
10. If the branch/office is converted into NAIO then type of the NAIO:
(See explanation in item no.7(a)(IV))
Status Name: ___________________________ Code:
11. Particulars of the Base/Absorbing Branch/office:
(a) In case of Conversion into NAIO:
i) Base Branch/Office Name: __________________________________
ii) Uniform Codes: Part – I (7 digits):
Part – II(7 digits):
iii) Full postal address: ______________________________
______________________________
(b) In case of Merger/Absorption of branches/offices/NAIOs:
i) Absorbing Branch/Office Name: ______________________________
ii) Uniform Codes: Part – I (7 digits):
Part – II(7 digits):
iii) Full postal address: ______________________________
______________________________
(c) If a branch, which is working as a base branch for some NAIOs, is
closed/converted into NAIO/merged with another branch, then the base branch
details of the NAIOs, which were earlier linked to the closed/converted/merged
branch, should be provided:
i) Base Branch/Office Name: _____________________________
ii) Uniform Codes: Part – I (7 digits):
Part – II(7 digits):
iii) Full postal address: ______________________________
______________________________
Note: 1) For explanatory notes kept in bracket against individual items
in this Proforma, please refer to the enclosed “EXPLANATIONS OF
ITEMS IN PROFORMA-I”.
2) No action will be taken unless Part-I and Part-II of 7-digit
Uniform Codes each are mentioned in this Proforma.
INSTRUCTIONS FOR FILLING PROFORMAE-I & II
NOTE: PLEASE READ THE INSTRUCTIONS BEFORE FILLING THE
PROFORMAE
I. Proforma-I should be submitted either on the day of opening of
branch/office/NAIO or afterwards but not before opening of
branch/office/NAIO.
II. Proforma-I is meant for all types of newly opened bank
branches/offices/NAIOs and Proforma-II is meant for reporting change
in status/postal address, closure/ merger/ conversion/ relocation
/upgradation, etc. of existing bank branches/offices /NAIOs.
III. Uniform code numbers had been so long assigned to
administratively independent offices/branches, submitting separate
returns to Reserve Bank of India (See explanation at 7(b)). Recently,
it has been decided to allot 9-digit uniform codes to Not
Administratively Independent Offices (NAIOs - temporary offices),
such as stand-alone ATMs/extension counter /satellite
office/representative office/cash counter/ inspectorate/ collection
counter/mobile office/Airport counter/ Hotel counter /Exchange
Bureau. However, Proformae for Temporary Office opened at the site
of a fair/exhibition, etc. should not be sent to DESACS.
IV. Public Sector Banks, which have been allowed to assign Part I code to
their new branches/offices/NAIOs should strictly follow the instruction
mentioned at III above, at the time of forwarding Proforma-I to RBI.
V. Upgradation of an NAIO into a full-fledged branch/office should be
treated as closure of NAIO and opening of a branch/office.
Accordingly, both Proforma – II for NAIO closure and Proforma – I
for upgradation into a branch/office should be submitted.
VI. Alternatively, if a branch/office is converted into NAIO, then Proforma – II
for closure of the branch/office and Proforma – I for conversion/opening of
the NAIO are required to be submitted.
VII. Proforma- I & II will not be accepted for allotment of Part-I & Part-
II/revision of Part-II code unless all items in the Proformae are filled up
properly.
EXPLANATIONS OF ITEMS IN PROFORMA-I
Item No.1(c):
Public sector banks (SBI and its 7 Associates, 19 Nationalised Banks &
Industrial Development Bank of India Ltd.) are allowed to assign 7/9-digit Part-I
Code Numbers only to their branches/offices/NAIOs and for other banks RBI
(DESACS) allots both Part-I & Part-II codes. Each NAIO is linked to some
independent branch. Last two digits (8th & 9th digits from the left) of Part – I
code for NAIOs follow the 7-digit Part – I code of the base branch.
UCN of branches/offices of banks comprises two parts as Part-I code and
Part-II code of 7 digits each; two additional digits are assigned to Part – I
code of NAIOs.
Part-I code is defined as follows:
• for branches/offices/NAIOs of commercial banks and other
financial institutions:
first three digits from the left stand for bank code
next four digits stand for branch code
last two digits stand for NAIO code.
• for branches/offices/NAIOs of state/district central co-op. banks,
state/central land development banks:
first four digits from the left stand for bank code
next three digits stand for branch code
last two digits stand for NAIO code.
• for branches/offices/NAIOs of other co-op. banks, salary earners’
societies, state financial corporations and tours, travels,
finance & leasing companies:
first five digits from the left stand for bank code
next two digits stand for branch code
last two digits stand for NAIO code.
Part-II code, irrespective of different categories of banks, is defined as
follows:
first three digits from the left stand for district code
next three digits stand for centre code within the district
last single digit stands for population range code.
Relationship between population range code and population group code is
shown below:
9 10 lakhs and above Metropolitan 4
8 5,00,000 to 9,99,999
7 2,00,000 to 4,99,999
Urban 3
6 1,00,000 to 1,99,999
5 50,000 to 99,999
4 20,000 to 49,999
Semi-Urban 2
3 10,000 to 19,999
2 5000 to 9999
1 Up to 4999 Rural 1
Population
Group Code
Population
Group
Population range
Last digit of Part II
of the Uniform Code
Number (Populaiton
Range code)
Item No.2(a):
The name of the Branch/Office/NAIO is to be written.
Item No.2(b):
Reference letter number and date of authorization/approval issued by RBI is to be
mentioned.
Item No.2(c):
The Licence No., if already available (as obtained from concerned Regional Offices
of RBI) is to be written; otherwise the same should be communicated later on along
with Uniform Codes.
Item No.2 (d):
The exact date (including month & year) of licence is to be indicated.
Item No.2 (e):
In case the branch/office/NAIO is opened after expiry of one year from the date of
issuing of licence, please indicate whether licence was re-validated or not and if
revalidated please mention the date of re-validation.
Item No. 3:
The exact date of opening including month & year is to be mentioned.
Item No. 4.1 to 4.3 and 4.6 to 4.8:
The names/numbers/codes are to be written against the appropriate item
number. PIN code against item No. 4.3(b) should be indicated. In respect of
mobile office and mobile ATM detailed address of the base branch/ office
should be reported.
Item No. 4.4:
The name of the locality i.e. the exact place, where the branch/office /NAIO is
located, is to be mentioned. The name of the locality may be the name of village in
case the branch/office/NAIO is opened in a village. In case of mobile office or
mobile ATM, respective details of the base branch/office should be reported.
Item 4.5 & 5(b):
The names of the Tehsil/Taluka/Sub-division and the Community Development Block
with reference to centre name stated at item 5(a) are to be indicated at item Nos. 4.5
and 5(b) respectively.
This may not be applicable in the cases of metropolitan centres.
In case of mobile office or mobile ATM, respective details of the base
branch/office should be reported.
Item No.5 (a):
The name of the Village/Town/City/Municipality/Municipal Corporation under
the jurisdiction of which the locality mentioned at item No.4.4 is included, is to
be written. The name of the village is to be written if the branch/office/NAIO is
opened in a village, which is a revenue unit/centre. In case of mobile office or
mobile ATM, respective details of the base branch/office should be reported.
Caution:
If the name of the centre in item no. 5(a) is not written correctly, then the
branch/office/NAIO may get wrongly classified with incorrect Part-II code. The
name of Panchayat/Block/Tehsil/District, etc. should not appear against item
Nos. 4.4 & 5(a) unless the branch/office/NAIO is located in the head quarter of
the Panchayat/Block/Tehsil/District.
Item No. 5(e): (refer Item No. 5(a) also)
Latest Census population figure of the Centre (revenue unit) where the
branch/office/NAIO is located should be stated. Population of whole of
Panchayat/Block/tehsil/district, etc., should not be considered. Population of a
revenue centre can be obtained from Census Handbook/Local Census Authority or
from local administration such as District Collector/ Tehsildar/Block Development
Officer, etc., and a certificate (in original) to this effect, covering following two
aspects, should be collected from the concerned local administration and forwarded:
(i) Name of the revenue centre, where the branch/office/NAIO under
reference is located.
(ii) Population of the said revenue centre as per the latest census report.
Item No. 6:
An office is administratively independent, if it maintains separate books of accounts
and is required to submit one or more BSR returns to RBI.
If there is no administratively independent branch/office of a regional rural bank or of
any other commercial/co-operative bank in the centre (revenue unit), as referred to at
item 5(a) above, within the limits of which the new branch/office is located, then put
tick mark () against "No", otherwise put tick mark () against "Yes".
Item No.7 (a):
The names & respective codes of different types (business status) of branches/
offices/NAIOs are listed in categories I to IV below. The appropriate status name &
corresponding code is to be written.
As the list is not exhaustive, please state exact status of the office/ branch/NAIO
under "Any other branch/office/NAIO " category:
I. IN CASE OF ADMINISTRATIVE OFFICE
CODE STATUS NAME
(01) Registered Office
(02) Central/Head Office/Principal Office
(03) Local Head Office
(04) Regional Office/Area Office/Zonal Office/Divisional Office/ Circle
Office
(05) Funds Management Office
(06) Lead Bank Office
(07) Training Centre
(09) Any other administrative office (not included above, pl. specify)
II.IN CASE OF GENERAL BANKING BRANCH
CODE STATUS NAME
(10) General Banking Branch
III.IN CASE OF SPECIALISED BRANCH
(A) Agricultural Development/Finance Branches
(11) Agricultural Development Branch (ADB)
(12) Specialised Agricultural Finance Branch Hi-Tech.(SAFB Hi-tech)
(13) Agricultural Finance Branch (AFB)
(B) S.S.I./Small Industries and Small Business Branches
(16) Small Business Development Branch/office
(17) Small Scale Industries Branch (SSI)
(18) Small Industries & Small Business Branch (SIB)
(C) Industrial/Corporate Finance/Large Advances Branches
(21) Industrial Finance Branch (IFB)
(22) Corporate Finance Branch (CFB)
(23) Hire-Purchase and Leasing Finance Branch
(24) Industrial Accounts Branch
(25) Large Advances Branch
(26) Business Finance Branch
(27) Mid Corporate Branch
(D) Asset Recovery Management/Industrial Rehabilitation Branches
(30) Asset Recovery Management Services Branch (ARMS)
(31) Industrial Rehabilitation Branch
(E) Capital Market/Custodial Services/Merchant/Mercantile Banking
Branches
(35) Capital Market Services Branch (CMS)
(36) Custodial Services Branch
(37) Merchant Banking Branch
(38) Mercantile Banking Branch
(F) Overseas/International Banking Offices/Branches
(41) International Banking Branch/office
(42) Overseas Branch
(43) International Business Branch/Office/Centre
(44) International Exchange Branch
(G) Commercial/Personal Banking Branches
(47) Non-Resident Indian (NRI) Branch
(48) Housing Finance Branch
(49) Personal Banking Services Branch
(50) Consumer Finance Branch
(51) Specialised Savings Branch
(52) Commercial and Personal Banking Branch
(53) Specialised Commercial Branch
(54) Draft Paying Branch
(55) Professionals Branch
(56) Locker Branch
(57) Specialised Trading Branch
(58) Diamond Branch
(59) Housing Finance Personal Banking Branch
(H) Collection & Payment/Quick(Fast) Service/STARS Branches
(63) Service Branch/Clearing Branch/Cell
(64) Collection and Payment Services Branch
(65) Quick Collection Branch
(66) Fast Service Branch
(67) Speedy Transfer and Realisation Services (STARS) Branch
(I) Other type of Specialised Branches
(71) Treasury Branch (Government Business)
(72) Stock Exchange Branch
(73) Auto-Tech Branch
(74) Fund Transfer Services (FTS) Branch
(75) Weaker Sections Branch
(76) Security Services Branch
(77) Specialised Woman Enterpreneurs Branch
(78) Specialised Cash Management Services Branch
(79) Microsafe Branch for Self Help Groups
(80) Any other category of specialised branch/office (not included
above, pl. specify)
IV. IN CASE OF NON-ADMINISTRATIVELY INDEPENDENT OFFICE(NAIO)
(85) Extension Counter
(86) Satellite Office
(87) Mobile Office
(88) Service Branch*
(89) Mobile ATM
(90) On-site ATM
(91) Off-site ATM
(92) Representative Office
(93) Exchange Bureau
(99) Any Other NAIOs (not included above, pl. specify)
* If it is not maintaining separate books of accounts
Item No. 7(b):
NAIO are Offfices for which separate books of accounts are not maintained and not
required to submit BSR returns to RBI. Name of the base branch/office and its
Uniform Code Numbers are to be provided with which the accounts of NAIO(s) will
be maintained.
Item No. 8(ii)(A)(d):
The appropriate Code among the options listed below is to be indicated:
Code: Type of Area
(0) Normal area
(1) Border area
(2) Disturbed area (High Risk)
(3) Area affected by natural calamities (flood/earthquake
prone area, etc.)
(4) Area not having adequate transport facility due to
snowfall, etc.
Note: For further clarification contact or write to
The Director,
Banking Statistics Division,
Department of Statistical Analysis & Computer Services,
Reserve Bank of India, C.O.,
C-9, 6th floor, Bandra-Kurla Complex,
Bandra (East),
Mumbai - 400 051.
Phone: (022) 2657 8100 ext. 7360
Fax: (022) 2657 0847 / 2657 2319
Appendix
List of Circulars consolidated by the Master Circular
No. Circular No. Date Subject
1 DBOD.No.BL.BC.99 /22.01.010/
2006-2007
24.05.2007 Doorstep Banking
2 DBOD.No.BL.BC.59/22.01.010/
2006-2007
21.02.2007 Doorstep Banking
3 DBOD.No.BL.BC.11/22.01.001/2006 01.07.2006 Master Circular on Branch
Authorisation
4 DBOD.No.BL.BC.72 /22.01.009/
2005-2006
22.03.2006 Financial Inclusion by
Extension of Banking Services
– Use of Business Facilitators
and Correspondents
5 DBOD.No.BL.BC.58 /22.01.001/
2005-2006
25.01.2006 Financial Inclusion by
Extension of Banking Services
– Use of Business Facilitators
and Correspondents
6 DBOD.No.BL.BC.55/22.01.001/
2005-06.
23.01.2006 Branch Authorisation Policy
7 DBOD.No.BL.BC.35/22.01.001/
2005-06.
08.09.2005 Liberalization of Branch
Authorisation Policy
8 DBOD.No.BL.BC.24/22.01.001/
2005-06.
03.08.2005 Branch Expansion Strategy of
banks
9 DBOD.No.BL.BC.92/22.01.001/
2004-05.
20.05.2005 Submission of Quarterly
Return-Proformae I &II
10 DBOD.No.BL.BC.86/22.01.001/
2004-05
30.04.2005 Doorstep Banking
11 DBOD.No.BL.BC.82/22.01.001/
2004-05.
27.04.2005 Shifting of branches/ offices-
Rationalization of procedure
12 DBOD.No.BL.BC.39/22.01.001/
2004-05.
10.09.2004 Opening of central processing
centres/ back offices etc.
13 DBOD.No.BL.BC.23/22.01.001/
2003.
11.09.2003 Providing Depository Services
at Extension Counters.
14 DBOD.No.BL.BC.13/22.01.001/
2003.
18.08.2003 Take over of bank branches.
15 DBOD.No.BL.BC.5/22.01.001/
2003.
23.07.2003 Third party transfer of funds
through ATMs.
16 DBOD.No.IBS.BC.32/23.03.001/
2002-2003.
17.10.2002 Closure of branches of foreign
banks.
17 DBOD.No.BL.BC.74/22.01.001/
2002.
11.03.2002 Conversion of General
Branches into Specialised SSI
branches.
18 DBOD.No.BL.BC.62/22.01.001/
2002.
28.01.2002 Third Party advertisement on
ATM Network.
19 DBOD.No.BL.BC.23/22.01.001/
2000-01.
12.09.2000 Opening of branches/
extension counters/ shifting
etc.-Obtention of prior licence.
20 DBOD.BC.No.127/12.05.005/
99-2000.
30.11.1999 Rationalisation of Returns
submitted by banks to RBI
21 DBOD.No.BL.BC.74/22.01.001/
98.
29.07.1998 Shifting of Rural branches
outside the Block/ Service
Area and closure of rural
branches.
22
DBOD.No.BL.BC.115/22.06.001/
97
21.10.1997 Branch Banking Statistics-
Submission of Monthly
Returns-Revision of Proformae
II & III
23
DBOD.No.BL.BC.64/22.01.003/
97.
05.06.1997 Opening of offices of
commercial banks in the
National Capital Territory
(NCT) of Delhi.NOC from Delhi
Development Authority (DDA).
24 DBOD.No.BL.BC.76/22.01.001/
96.
17.06.1996 Delegation of administrative
powers to Regional Offices of
DBOD.
25 DBOD.No.BP.BC.60/21.03.051/
96
16.05.1996 Automated Teller Machines
(ATMs)
26 DBOD.No.BP.BC.123/21.03.051/
95.
16.10.1995 Automated Teller Machines
(ATMs)
27 DBOD.No.BP.BC.152/21.03.051/
94
29.12.1994 Automated Teller Machines
(ATMs)
28 DBOD.No.BL.BC.152/22.01.001/
93
24.08.1993 Opening /Closing of bank
branches.
29 DBOD.No.BL.BC.41/22.01.001/
92.
09.10.1992 Delegation of authority to
banks for shifting of offices,
spinning-off of business etc.
30 DBOD.No.BL.BC.132/22.01.001/
92.
20.05.1992 Delegation of authority to
banks for shifting of offices,
opening of controlling offices,
spinning-off of business etc.
31 DBOD.No.BL.BC.24/BL.66/91 06.09.1991 Change in names of
offices/branches in Kerala.
32 DBOD.No.BL.BC.132/C.168 (M)-91. 11.06.1991 Opening of Specialised
Housing Finance Branches.
33 DBOD.No.BL.BC.81/C168 (64D)-91. 16.02.1991 Opening/closing of bank
branches.
34 DBOD.No.BL.BC.68/C168 (64D)-91 16.01.1991 Approach to future branch
expansion.
35 DBOD.No.BL.BC.16/C168 (64D)-90 12.09.1990 -do-
36 DBOD.No.BL.BC.72/C168 (64D)-87 14.12.1987 Branch Licensing Policy 1985-
90 -Setting up of
Satellite/mobile branches.
37 DBOD.No.BL.BC.86/C168-84 21.08.1984 Change in the name of branch
necessitated due to change in
name of locality/street etc.
38 DBOD.No.BL.BC.147/C168-78 20.10.1978 Change in name of branches
of banks
39 DBOD.No.BL.99/C.168-68 19.11.1968 Opening of Mobile Offices

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Friday, December 28, 2007

Banking Regulation & Tenancy Law - RBI Guidelines for Branch Office