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2 Act 3 PNB The Rules Neutral Citation Number 2022/DHC/005617

4. The second principal ground of attack to the proceedings initiated by the Institute is based on the contention that the initiation of action under the Rules was clearly based on various news articles which appeared in the print and visual media platforms. Those reports, it would be pertinent to note, related to what is now infamously known as the Nirav Modi Scam which unfolded at the Brady Branch of the PNB. The petitioners would contend that those newspaper reports, for reasons which shall stand elaborated hereinafter, cannot constitute "information" on the basis of which disciplinary proceedings could have been initiated.

6. The writ petitioners disclose that the first meeting between the Joint Statutory Auditors and the management of PNB was held on 29 December 2017. On 29 January 2018, the Deputy Manager in the PNB Zonal Office at Mumbai is stated to have lodged a criminal complaint against three firms connected with the fugitive Nirav Modi namely M/s Diamond R US, M/s Solar Exports and M/s Stellar Neutral Citation Number 2022/DHC/005617 Diamonds. The First Information Report alleged that the aforesaid firms had defrauded PNB to the tune of Rs 280.70 crores. An FIR is thereafter stated to have been registered against Nirav Modi and his group of firms on 31 January 2018. The incident of fraud detected at the concerned branch of PNB and information connected therewith is also stated to have been provided to the National Stock Exchange of India on 05 February 2018.

9. On 13 February 2018, PNB is stated to have lodged three separate criminal complaints for fraud amounting to Rs.6498.20 crores, Rs. 9.10 crores and Rs. 4886.72 crores against various firms and companies connected with Nirav Modi. Upon these complaints being filed, various newspapers carried articles exposing the scam detected at PNB and the liability suffered by PNB being quantified at Rs.11,400 crores.

33. Mr. Nandrajog submitted that the disciplinary proceedings initiated in any case lose sight of the fact that the limited review was restricted to the period 01 October 2017 to 31 December 2017 only. The submission was that since the incidents which formed the foundation of the Nirav Modi Scam had not occurred in the quarter which was reviewed or formed part of the limited review, the petitioners could not have been proceeded against for any act of alleged professional misconduct.