BHAGWATI DEVELOPERS vs PEERLESS GENL. FIN. & INVESTMENT CO & OR

The Supreme Court upheld the authority of the Reserve Bank of India to issue directions to ensure the stability and accountability of financial operations, as established in Peerless General Finance and Investment Co. Limited vs. Reserve Bank of India (1992) 2 SCC 343. The Court ruled that the Respondent Company was required to classify depositors' funds as liabilities in their balance sheets, thereby affirming the validity of the Reserve Bank's directives. Consequently, the Respondent was mandated to transfer Rs. 217.34 crores to the Depositors’ Account, debiting the Profit & Loss Account accordingly.