TMI Blog2019 (4) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... on-speaking with regard to the aspect of non consideration of the prayer for condonation made as by the first petitioner or that the impugned order suffers from the breach of principles of natural justice. Petition dismissed. - W.P. No. 489 of 2018 - - - Dated:- 10-4-2019 - MR DEBANGSU BASAK, J. For The Petitioners : Mr. S.N.Mukherjee, Sr. Advocate, Mr. N. Chowdhury, Advocate And Mrs. Anuradha Poddar, Advocate For The Respondents : Mr. L.K. Gupta, Sr. Advocate And Mr. Dilip Kr. Kundu, Advocate JUDGMENT DEBANGSU BASAK, J.:- The petitioners have assailed an order dated August 9, 2018 issued by the Regional Director of Reserve Bank of India (RBI) exercising powers under Section 45-IA of Reserve Bank of India Act, 1934. Learned Senior Advocate appearing for the petitioners has submitted that, the impugned order is vitiated by breach of principles of natural justice. He has submitted that, the second proviso to Section 45- IA(6) of the Act of 1934 provides for an opportunity of hearing to be granted to the persons suffering the show-cause notice. In the present case, the petitioners received a show-cause notice dated May 10, 2018. The petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that, the charge of violation of the notification dated March 27, 2015 as made in the show-cause notice stands admitted in the reply. Once, the person suffering the show-cause notice admits the charges, he need not be afforded a personal hearing. In support of such contentions, he has relied upon All India Reporter 1972 Supreme Court page 32 (Channabasappa Basappa Happali v. The State of Mysore) , 2005 Volume 5 Supreme Court Cases page 337 (Viveka Nand Sethi v. Chairman, J K Bank Ltd. Ors.) , 2006 Volume 2 Supreme Court Cases page 315 (Mohd. Sartaj Anr. v. State of U.P. Ors.) . Learned Senior Advocate appearing for the respondents has submitted that, in any event, the requirement of hearing under the principles of natural justice does not mean that, an oral hearing is a must in all cases. In support of such contention, he has relied upon a judgment and order dated March 3, 2017 passed in W.P. No. 11089(W) of 2012 (The Peerless General Finance Investment Co. Ltd. Ors. v. Reserve Bank of India Ors.) and All India Reporter 1966 Supreme Court page 671 (Madhya Pradesh Industries Ltd. v. Union of India Ors.) . Learned Senior Advocate appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry alternative remedy is not an absolute bar to the maintainability of a writ petition. According to him, in the facts of the present case, the impugned order being non-speaking is a nullity and therefore is required to be quashed. The first petitioner claims itself to be a company incorporated under the provisions of the Companies Act, 1956. It was carrying on business as a non-banking financial institution pursuant to a Certificate of Registration dated October 12, 2001 issued by RBI. The first petitioner suffered a show-cause notice dated March 14, 2018 under Section 45-IA(6) of the Act of 1934. It was alleged in such notice that, the first petitioner failed to communicate the name, designation and address of the principal officer to the Financial Institution Intelligence Unit India. There are other allegations as against the first petitioner in such show-cause notice. The first petitioner replied to such show-cause notice by its letter dated April 18, 2018. The first petitioner suffered a second show-cause notice dated May 10, 2018 under Section 45-IA(6) read with Section 48B of the Act of 1934. It was alleged as against the petitioner that, the first petitioner did not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted the contents of the show-cause notice dated May 10, 2018, the change of failure of the first petitioner to comply with the notification dated March 27, 2015 and the contents of the reply of the petitioners dated June 22, 2018. After discussing the same, the impugned order has held the first petitioner not to be eligible to continue to carry on the business of nonbanking financial company on account of its failure to comply with the directions of RBI as regards achievement of the specified NOF. The show-cause notice dated May 10, 2018 and the impugned order dated August 9, 2018 are under Section 45-IA of the Act of 1934. Section 45-IA of the Act of 1934 deals with the requirement of registration and net owned fund. Relevant provisions for the purpose of the instant writ petition are sub-Sections 6 and 7 of Section 45-IA which are as follows:- ( 6) The Bank may cancel a certificate of registration granted to a non-banking financial company under this section if such company- ( i) ceases to carry on the business of a non-banking financial institution in India; or ( ii) has failed to comply with any condition subject to which the certificate of regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce sheet of the company after deducting therefrom- ( i) accumulated balance of loss; ( ii) deferred revenue expenditure; and ( iii) other intangible assets; and ( b) further reduced by the amounts representing- ( 1) investments of such company in shares of- ( i) its subsidiaries; ( ii) companies in the same group; ( iii) all other non-banking financial companies; and ( 2) the book value of debentures, bonds, outstanding loans and advances (including hire-purchase and lease finance) made to, and deposits with,- ( i) subsidiaries of such company; and ( ii) companies in the same group; to the extent such amount exceeds ten per cent of (a) above. ( II) subsidiaries and companies in the same group shall have the same meanings assigned to them in the Companies Act, 1956 (1 of 1956). The issue of maintainability of the writ petition as raised by the respondents requires consideration. Whirlpool Corporation (supra) has dealt with the powers to issue prerogative writs under Article 226 of the Constitution and held as follows:- 14. The power to issue prerogative writs under Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , then such a writ petition cannot be said to be not maintainable. The allegation of breach of principles of natural justice can be gone into by the writ Court. The present writ petition therefore cannot be said to be non maintainable merely because a statutory alternative remedy of appeal exists. There is another aspect to the maintainability as has been contended on behalf of the respondents. A.V. Venkateswaran, Collector of Customs, Bombay (supra) has held that, if a petitioner has disabled himself from availing the statutory remedy by his own fault in not doing so within the prescribed time, he cannot be permitted to urge that as a ground for the Court dealing with his petition under Article 226 of the Constitution to exercise its discretion in his favour. In the facts of the present case, the petitioner approached the writ Court within the prescribed statutory period of filing an appeal. The impugned order was passed on August 9, 2018 and was sought to be served upon the first petitioner by a letter dated August 27, 2018. The petitioners claim to have received the communication on September 14, 2018 and the writ petition was affirmed and filed on September 28, 2010. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was in breach of principles of natural justice or was unfair. In the present case, the first petitioner admitted the charges made against it. Viveka Nand Sethi (supra) has held as follows:- 22. The principle of natural justice, it is trite, is no unruly horse. When facts are admitted, an enquiry would be an empty formality. Even the principle of estoppel will apply. [See Gurjeewan Garewal (Dr.) vs. Dr. Sumitra Dash. The principles of natural justice are required to be complied with having regard to the fact situation obtaining therein. It cannot be put in a straitjacket formula. It cannot be applied in a vacuum without reference to the relevant facts and circumstances of the case. [See State of Punjab vs. Jagir Singh (2004) and Karnataka SRTC vs. S.G. Koturappa. Mohd. Sartaj Anr. (supra) has held that, mere violation of natural justice is not sufficient. A petitioner has to establish defacto prejudice other than non-issuance of notice to succeed on an issue of breach of principles of natural justice. Madhya Pradesh Industries Ltd. (supra) has construed Rule 55 of the Mineral Concessions Rules, 1960 and held that, principles of natural justice require a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hment awarded. Therefore, question of delving into the provisions of Section 53B and 53G of the Act of 1934 to appreciate whether the quantum of punishment imposed by the impugned order was proportionate to the charges does not arise. The petitioners have contended that, the request for condonation has not been considered by the impugned order. An order need not contain elaborate reasons. It is sufficient that, the order is speaking on the points raised. The charge against the first petitioner is failure of compliance with the requirements under the notification dated March 27, 2015. Such a charge, if proved, can result in the withdrawal of the Certificate of Registration as done in this case. The petitioners were well aware of the charge. They had accepted such charge in their reply dated June 22, 2018. Their reply has been considered by the impugned order. While considering such reply, the authority passing the impugned order did not find merit in the defence taken. The question therefore of non consideration of the prayer for condonation as made by the first petitioner in the reply dated June 22, 2018 does not arise. Such a prayer is deemed to have been rejected from the teno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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