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2019 (4) TMI 394 - HC - Companies LawWilful defaulter - Petitioners default in meeting its repayment obligation to the respondent no1./bank - Opportunity of personal hearing through advocate - HELD THAT:- Bank paid the amount to the foreign exporters for the purchase of machinery by the petitioner. The petitioner is legally bound to repay this amount to the Bank therefore, even if, the loan amount or the fund was not directly disbursed in the petitioner’s current account but it was directly paid to the exporters on behalf of the petitioner by the respondent – Bank. Hence, the relationship of lenders and borrower has been established between petitioners and respondent No.1/bank . Since, the petitioners have defaulted in meeting its repayment obligation to the respondent no1./bank even when it has a capacity to pay therefore, rightly invited findings in respect of wilful default. The company was having the equity share of ₹ 103.43 Crores, and out of which withdrew the ₹ 54.22 Crores equity share without honouring its commitments under the letters of credit opened by to respondent No.1/bank . Therefore, under 2.1.3(c) the petitioners have rightly been categorized as ‘wilful defaulter’. Opportunity of personal hearing through advocate is concerned a coordinate Bench of this court in the case of Surender (2018 (6) TMI 1587 - MADHYA PRADESH HIGH COURT) has already held that the borrower is not having right to be represented through lawyer/advocate under the master circular. As per clause 3.(b) the personal hearing is available only to borrower Director and Promoter of the alleged default unit. The identification committee is neither a court nor a tribunal. Therefore, I have no reason to take a different view as taken by the coordinate bench of this court in the case of Surender (supra). Even otherwise, the similar issue is also pending before the Div. So far the opportunity of hearing by review committee is concerned, same is not provided in clause 3 of master circular. The mechanism is provided for identification of ‘wilful defaulter’ by the identification committee. The order passed by committee is liable to be reviewed by another committee headed by superior officer named as review committee. Therefore, the RBI has decided to provide double check system by two levels of authorities before declaring any unit as ‘wilful defaulter’. Since the review committee has affirmed the stand taken by identification committee therefore, opportunity of hearing is not required. It is not like remedy of appeal to the default unit. If the identification committee does not pass any order declaring the borrower as ‘wilful defaulter’ then, review committee did not be setup to review such type of decision. It means the role of review committee is only to cross-check the decision of identification committee before declaring borrower as ‘wilful defaulter’ otherwise, a right would have been given to Bank also to apply for review before the review committee in case, identification committee does not pass an order declaring the borrower as ‘wilful defaulter’. Hence, this contention raised by the petitioners is also not having any substance. Hence same is liable to be rejected. By impugned communication dt.23.10.2018, the name of the petitioner has been forwarded to CIC.So far the offer of One Time Settlement is concerned, the Bank has already initiated the proceeding for recovery before DRT, Jabalpur. If the petitioners are really serious for settlement dispute with the respondents – Bank then they may submit an offer before the DRT in a pending proceeding for which no direction is required from this court. The petition is accordingly, dismissed.
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