TMI Blog2019 (2) TMI 1674X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esignated person has to meet and form an opinion that an event of wilful default, within the meaning of such Master Circular, has occurred for it to issue a show-cause notice. In the present case, a Regional Manager of the Bank has issued a notice claiming that, the petitioner would be classified as a wilful defaulter, if adequate cause is not shown. According to him, the impugned writing being wholly without jurisdiction should be quashed. Learned advocate for the Bank submits that, the Bank has formulated a policy of Non-Cooperative Borrowers and Wilful Defaulters 2018-19. In terms of such policy, the Wilful Defaulters Committee constituted in terms of the Master Circular meets to identify the wilful defaulters. Upon such identif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact of wilful default and the reasons for the same. An opportunity should be given to the borrower and the promoter/whole-time director for a personal hearing if the Committee feels such an opportunity is necessary. To my understanding, the Master Circular requires formation of a Wilful Defaulter's Committee by a Bank consisting of persons identified in such Master Circular. The Committee must be of three members. The Committee must be headed by an Executive Director or equivalent of the Bank. The other two members must be of the rank of General Manager/ Deputy General Manager. Upon such Wilful Defaulter's Committee being constituted, such committee is to meet to identify events of default. The master Circular requires th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, 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. On the strength of the same logic, the requirement to issue notice cannot be delegated. As noted above, the Committee is required to be manned by persons who are identified by their rank in the Master Circular. Therefore, such persons cannot delegate their authority to any person. The Committee must be in terms of the Master Circular. The identification of the event of wilful default must be in terms of the Master Circular. Deviations therefrom vitiate the entire proces ..... X X X X Extracts X X X X X X X X Extracts X X X X
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