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2020 (7) TMI 27 - HC - Indian LawsWilful Defaulters or not - petitioners contend that the Show Cause Notice was issued by an Assistant General Manager of the Bank, who did not qualify even for being a member of the WDIC - Oppression and Mismanagement - siphoning of funds - HELD THAT:- The writ petitioners in the instant case had avoided submitting their reply to the show cause notice of the bank, despite getting several opportunities, even within the extended time afforded by the bank. In spite of the delay, although the bank was under no obligation to do so, it dealt with the salient objections raised by the petitioners in their reply, in the impugned order declaring the petitioners to be wilful defaulters. Sufficient reasons were provided for the decision, the factual and legal merits of which are for the review committee, and not this court, under Article 226 of the Constitution, to enter into and decide. Moreover, the purview and context of a notice under Section 13 (2) under the SARFAESI Act are somewhat different from those of a wilful defaulter decision of the WDIC under the RBI guidelines of 2015. Not only are the scope and purpose of the two provisions different, but it is the legally constituted WDIC, and not the concerned bank, which passes such order in the latter case. The fallout of a notice under Section 13(2) is more serious and takes only about two more steps for the bank to take penal action against the borrower under the SARFAESI Act. Hence the scope of interference in writ jurisdiction logically ought to be wider in case of a violation of Section 13(3A), SARFAESI Act than a wilful defaulter declaration, the latter being somewhat more preliminary in nature and subject to further checks and bounds, particularly a confirmation by the review committee upon considering the legality and factual veracity of the declaration. Petition dismissed.
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