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2019 (2) TMI 1674 - HC - Indian LawsMaster Circular dated July 1, 2015 - Identification of Wilful Defaulter - HELD THAT:- The power given to the Wilful Defaulter's Committee to issue the show-cause notice and decide on the issue cannot be delegated. It is so, not only because of the language used in the provisions of the Wilful Defaulter Master Circular but also by reason of the mechanism provided in the Master Circular for identification of a wilful default, the requirement to have a decision informed with reasons taken by a Committee constituted by the persons designated in the Master Circular - The Master Circular requires adherence to the principles of natural justice by the Wilful Defaulter's Committee. It requires the Committee to issue the show cause notice, allow a reply to be filed and then take a decision thereon. Upon the Wilful Defaulter's Committee identifying an event of default, an opportunity is granted to the person concerned to explain itself by issuance of the show- cause notice. Therefore, the persons who issue the show-cause notice, must be the persons who are authorised by the Master Circular to form the opinion that an event of wilful default within the meaning of the Master Circular has occurred. Formation of opinion cannot be delegated. Any policy of a Bank, which is in deviation of the Master Circular, will not help the Bank, in allowing a person other than the Committee formulated under the Master Circular to assume jurisdiction to discharge functions specifically vested upon the Committee conceived by paragraph 3 of the Master Circular. A policy of the Bank cannot be placed at a higher pedestal than the Master Circular of the Reserve Bank of India. It must be subservient to the Master Circular - The impugned actions taken by the Bank does not meet the test laid down under the Master Circular. The impugned notice has not been issued by the persons required to do so under the Master Circular. The impugned notice is, therefore, quashed. Petition disposed off.
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