The Reserve Bank of India (RBI) has filed a writ appeal before the Madras High Court challenging a single judge’s order with respect to remitting a few crores of rupees lying in the bank accounts of Sushil Mazumdar alias Swami Satyananda, an Indian-origin spiritual guru who had established Sadhana Ashram at San Presto of Assisi in Italy in 1976 but died in Tibet in 2007.
Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan have entertained the appeal and stayed the single judge’s order to remit the money to the bank account of Sadhana Ashram in Italy. They also granted four weeks’ time for Switzerland based Marco Licata, the past president and incumbent executive committee member of the Ashram, to file his counter affidavit.
Initially, it was Mr. Licata who had filed a writ petition in the High Court in 2022 claiming to be the nominee of Swami Satyananda. He told the court that the spiritual guru had held large amounts of investments in State Bank of India’s (SBI) branch in Puducherry and complained that the bank was refusing to remit the amount to his personal account despite multiple requests made since 2008.
SBI’s claim was that the nomination had not been executed properly and the writ petitioner could not get any relief despite approaching the banking ombudsman. Therefore, after the filing of the writ petition, Mr. Licata filed an affidavit stating that he would have no objection if the money was remitted directly into the Italian bank account of Sadhana Ashram and not to his personal account.
After taking the affidavit on file, Justice N. Anand Venkatesh wrote that the aim of SBI should be ensure that the money reaches the correct hands. However, since the issue involved foreign remittance to the bank account held by the ashram at Credem Banca, Perugia branch, Italy; the judge directed RBI to clarify whether such a transaction could be carried out in terms of the Banking Regulation Act of 1949.
RBI, on its part, filed a detailed counter affidavit before the single judge stating that only an individual could be appointed as a nominee by an account holder and no association or entity could be considered to be a nominee for the purpose of remitting the money. The central bank also told the court that its permission was absolutely necessary for transferring the funds from India to the bank account in Italy.
Justice Venkatesh, however, relied upon a 2016 Calcutta High Court judgement, to hold that the term ‘person’ used in Section 45-ZA of the 1949 Act should be construed to include any company or association or body of individuals too. He agreed with the Calcutta High Court that the meaning of the term should be borrowed from the General Clauses Act since the Banking Regulation Act does not define it.
“Consequently, it must be held that even a company or an association or a body of individuals, whether incorporated or not, can be appointed as a nominee,” the single judge had ruled and ordered that the money lying in the multiple bank accounts of Swami Satyananda must be transferred to the Italian bank account of his ashram within eighth weeks.