TMI Blog2020 (8) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... ically stand withdrawn - Petition disposed off. - W.P.(C) 3136/2020 & CM APPL.10898/2020 - - - Dated:- 29-7-2020 - HON'BLE MR. JUSTICE JAYANT NATH Petitioner Through : Manik Dogra, Mr.Dushyant Manocha, Ms.Ananya Ghosh, Mr.Dhruv Pande and Mr.Brian Henry Moses, Advs. Respondent Through : Mr.Vinod Gupta, Adv. JAYANT NATH, J.(ORAL) 1. This hearing is conducted through video conferencing. 2. This writ petition is filed by the petitioners seeking the following reliefs: a) Issue a writ of certiorari quashing the Impugned Notice dated 07.09.2019 as well as the consequent Impugned Proceedings and the decision dated 13.02.2020 taken by the Respondent to declare the Petitioners as Wilful Defaulters under the Master Circular; b) Issue a writ of Mandamus or any other appropriate writ, order, or direction in the nature thereof, restraining the Respondent from reporting the names of the Petitioners to the Reserve Bank of India, credit rating agencies or any other third party as wilful defaulters under the Master Circular; In the alternative, assuming that the Respondent has already reported the names of the Petitioners to the Reserve Bank of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appear for a personal hearing on 29.11.2019. It is strongly urged that despite several attempts and a request to the liquidator also for certain documents, complete details were not provided to the petitioners. The petitioners on 29.11.2019, appeared for the personal hearing. The petitioners brought to the notice of the persons present the order dated 01.11.2019 of this court and the fact that the same has not been complied with. It was also pointed out that in the absence of the information sought the petitioners were constrained to respond to the allegations only at a generic level. Thereafter, the petitioners received a communication dated 16.03.2020 stating that the account in question has been declared as wilful defaulter and the names of the petitioners have been reported to RBI and published on the bank s website. 7. The respondent has filed a counter affidavit. In his counter affidavit, the respondent has stressed that all specific demands raised for the documents have been duly complied with and that the respondent has complied with the order of this court dated 01.11.2019 in W.P.(C) 11577/2019. It is further stated that it is admitted by the petitioners that they have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independent directors / non-executive directors of the bank and the Order shall become final only after it is confirmed by the said Review Committee. However, if the Identification Committee does not pass an Order declaring a borrower as a wilful defaulter, then the Review Committee need not be set up to review such decisions. xxxxx. 12. Similarly, the Supreme Court in State Bank of India v. M/s Jah Developers Pvt. Ltd. Ors.(supra) held as follows: 24. Given the above conspectus of case law, we are of the view that there is no right to be represented by a lawyer in the in-house proceedings contained in paragraph 3 of the Revised Circular dated 01.07.2015, as it is clear that the events of wilful default as mentioned in paragraph 2.1.3 would only relate to the individual facts of each case. What has typically to be discovered is whether a unit has defaulted in making its payment obligations even when it has the capacity to honour the said obligations; or that it has borrowed funds which are diverted for other purposes, or siphoned off funds so that the funds have not been utilised for the specific purpose for which the finance was made available. Whether a defau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Developers Pvt. Ltd. Ors.(supra), the First Committee after following para 3(a) and (b) of the said Circular dated 01.07.2015 must serve its order on the borrower as soon as it is made. The borrower then has an opportunity to make a representation against such an order within 15 days to the Review Committee. The said representation to the Review Committee can be a full representation on the facts and law. The Review Committee must then pass a reasoned order on such representation which would then be served on the borrower. The Supreme Court incorporated all these steps into the revised Master Circular dated 01.07.2015. The plea of the learned counsel for the respondent claiming that the said judgment of the Supreme Court does not deal with the Circular dated 01.07.2015, is clearly incorrect. 14. In the present case, a perusal of the impugned order dated 16.03.2020 shows that it simply says as follows: 1. That you have failed to adhere to the terms and conditions of the sanction and defaulted in repayment of dues. Accordingly your captioned account has been declared as Wilful Defaulter on 13.02.2020 as per RBI Guidelines. 2. That your names as wilful defaulters are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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