The Supreme Court on Monday issued notices to stockbroker Ketan Parekh, Central Bureau of Investigation and the Gujarat government on a petition filed by Madhavpura Mercantile Co-operative Bank challenging granting of bail to the broker in the Rs 888 crore (Rs 8.88 billion) fraud case.

A Bench comprising of Justice Y K Sabharwal and Justice H K Sema issued the notices after hearing petitioner's counsel Ashok Desai and Mahesh Agarwal who contended that in a fraud of this nature the lower courts should not have granted bail to Parekh.

MMCB alleged that though the amount of defalcation and fraud committed by Parekh was to the tune of Rs 888 crore, the Chief Metropolitan Magistrate had granted him bail on the condition that he paid an amount of Rs 16.41 crores (Rs 164 million) on or before February 2002 and a further Rs 380 crore (Rs 3.8 billion) within three years.

The petitioner said the accused defaulted on the first installment and the trial court refused to give extension for the same. However, the Gujarat high court had extended the time for deposition of the first installment.

The bank had filed a petition in the high court seeking cancellation of the bail granted to Parekh but the same was rejected. It, then, filed an appeal in the Supreme Court challenging the high court order.

It said that huge amount of public money was defrauded and demanded that the bail granted to Parekh be cancelled.