SC orders banks to deposit Rs 400 crore

The Supreme Court, on Monday, ordered nationalised banks - Punjab National Bank, Union Bank of India and the Indian Bank - to deposit a sum of Rs 400 crore within 15 days with the Prothonotary and Master of Bombay High Court as part of the bank guarantee money due to the Board of Control for Cricket in India (BCCI).

Nimbus Communications Ltd had submitted an unconditional bank guarantee from these three banks to the cricket board to secure payment of dues after entering into a media rights license agreement with BCCI for the period from April 2010 to March 2014.

However, in 2011, the BCCI terminated the agreement with Nimbus citing payment defaults and sought to encash the bank guarantees (in possession of BCCI) provided by the nationalised banks. The banks refused to pay the money - to the tune of Rs 1600 crores - which led to the BCCI filing summary suits against the three banks.

The matter first came up before the Bombay High Court and the three banks were granted leave to defend the suits on a condition that they deposit Rs 400 crore with the Prothonotary and Master of the Bombay High Court, who would then redeposit the sum with the respective banks once again. (Times of India)