Arun Jaitley, Bhartiya Janata Party MP in the Rajya Sabha and senior advocate, has decided to defend Ketan Parekh in the Supreme Court.
The broker is involved in various cases against Madhavpura Mercantile Co-operative Bank Limited based in Gujarat. The decision of Jaitley has been given a political colour.
"Ketan Parekh had secured a conditional bail on the ground that he would pay Rs 30 crore (Rs 300 million) in the next four months. We had expected a larger recovery from him, but that will not be possible now. Jaitley's decision to defend Parekh will greatly dampen the recovery," Jairmabhai Patel, chairman of MMCB said.
This has become a big issue in the state BJP. There is a proxy war going on, in which the real target is not Jaitley, but Chief Minister Narendra Modi.
MLAs said both Jaitley and Modi were culpable in a move that would delay getting the MMCB investors' money back. Dhiru Gajer, a BJP MLA who had inserted paid advertisements criticising Modi, is one of those running the campaign.
However, Parekh's lawyers argue that Jaitley's intervention has ensured that their client will stay out of jail and will continue to return the money in instalments.
The RBI suspended MMCB from the clearing house in March 2001 after a preliminary inquiry revealed that the bank was facing a liquidity crunch, and was in the middle of the pay order scam involving Parekh.
The bank's original revival package period was to expire on August 24, 2004. It has been extended since. Parekh was on bail, pending payment of Rs 380 crore (Rs 3.8 billion) as dues to MMCB. When he defaulted, the bail was cancelled.
At this stage, Jaitley became his lawyer. He negotiated with the court that the repayment schedule be rationalised so that Parekh continued to pay smaller installments. If he had gone back to jail, he would have become a notified person. He would have been denied access to any funds, a sure route towards the eventual liquidation of MMCB.
Gujarat BJP sources said, "There is nothing unfair in this. As an advocate, Jaitley has the right to fight any case he likes." Minister of State for Co-operation Bhupendrasinh Chudasama shied away from commenting on the issue.
When contacted, Jaitley said legal propriety forbade him from speaking on the matter.
But the ire of depositors of co-operative banks in Gujarat, especially those of the MMCB, is being leveraged by political leaders who want to see Jaitley -and Modi -- in the dock. On Tuesday, the all-Gujarat co-operative banks depositors and account holders association staged a demonstration in the city, demanding Jaitley quit the Rajya Sabha.
"Jaitley has been elected as a Member of Parliament from Gujarat by the people of the state. It is his moral duty to safeguard their interests," said Prakash Gurjar, president of the association.
