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TMI Blog2025 (4) TMI 1592X X X X Extracts X X X X X X X X Extracts X X X X ..... F 2025 (Arising out of SLP (C) No. 28231 of 2023) CRIMINAL APPEAL NO(S). .......... OF 2025 (Arising out of SLP (Crl.) No(s). 6371 - 6374 of 2024) CIVIL APPEAL NO. .......... OF 2025 (Arising out of SLP (C) No. 29121 of 2024) CIVIL APPEAL NO. .......... OF 2025 (Arising out of SLP (C) No. 29119 of 2024) CIVIL APPEAL NO. .......... OF 2025 (Arising out of SLP (C) No. 29120 of 2024) CRIMINAL APPEAL NO. .......... OF 2025 (Arising out of SLP (Crl.) No. 18414 of 2024) CRIMINAL APPEAL NO. .......... OF 2025 (Arising out of SLP (Crl.) No. 420 of 2025) CRIMINAL APPEAL NO. .......... OF 2025 (Arising out of SLP (Crl.) No. 18393 of 2024) CRIMINAL APPEAL NO. .......... OF 2025 (Arising out of SLP (Crl.) No. 18394 of 2024) CRIMINAL APPEAL NO. .......... OF 2025 (Arising out of SLP (Crl.) No. 18396 of 2024) CRIMINAL APPEAL NO. .......... OF 2025 (Arising out of SLP (Crl.) No. 18395 of 2024) CRIMINAL APPEAL NO. .......... OF 2025 (Arising out of SLP (Crl.) No. 634 of 2025) CRIMINAL APPEAL NO. .......... OF 2025 (Arising out of SLP (Crl.) No. 630 of 2025) CRIMINAL APPEAL NO. .......... OF 2025 (Arising out of SLP (Crl.) No. 631 of 2025) CRIMINAL APPEAL NO. .......... OF 2025 (Arising out of SLP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Master Directions require the Banks to refer certain categories of cases to the State Police or the Central Bureau of Investigation (hereinafter referred to as "CBI"), as a general rule. Aggrieved by the same, the respondents approached different jurisdictional High Courts, challenging the validity of the Master Directions, and the actions taken consequently. 3. The High Courts, vide the impugned orders, have quashed not only the administrative actions initiated in pursuance of the Master Directions, but also the First Information Reports (FIRs) registered and the subsequent criminal proceedings initiated against the respondents. Placing reliance upon the ratio of the judgment of this Court in State Bank of India and Others v. Rajesh Agarwal and Others, (2023) 6 SCC 1 (hereinafter referred to as "Rajesh Agarwal's case"), the administrative actions were quashed primarily on the ground of non-adherence to the principles of natural justice, more specifically the principle of Audi Altarem Partem, as the concerned respondents were not given an opportunity of being heard before the companies' bank accounts were declared as fraudulent/blacklisted. The High Courts consequently quashe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like to reiterate that an administrative action and a criminal proceeding stand on different footings, as clarified in para 39 of Rajesh Agarwal's case (supra). 7. An FIR, by taking cognizance of an offence, merely sets the law into motion. This has nothing to do with a decision on the administrative side, made by a different authority. Merely because the facts are same or similar, one cannot say that in the absence of a valid administrative action, no offence which is otherwise cognizable, can be registered. At that stage, one only has to see the existence of a cognizable offence, based on the FIR registered. Therefore, even assuming that there is no action forthcoming on the administrative side, an FIR can be held to be maintainable. The scope and role of both the actions are totally different and distinct, more so when undertaken by different statutory/public authorities. 8. The foundational facts may well be the same. Even in a case where an FIR is registered based on an administrative action, setting aside the latter on a technical or a legal premise would not ipso facto nullify the former. It is ultimately a matter for investigation by the appropriate authority. When an adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trative in nature. This has also been acceded to by RBI and lender banks in their written submissions. It is now a settled principle of law that the rule of audi alteram partem applies to administrative actions, apart from judicial and quasi-judicial functions. [A.K. Kraipak v. Union of India, (1969) 2 SCC 262; St. Anthony's College v. Rev. Fr. Paul Petta, 1988 Supp SCC 676 : 1989 SCC (L&S) 44; Uma Nath Pandey v. State of U.P., (2009) 12 SCC 40 : (2010) 1 SCC (Cri) 501.] It is also a settled position in administrative law that it is mandatory to provide for an opportunity of being heard when an administrative action results in civil consequences to a person or entity. xxx xxx xxx 98. The conclusions are summarised below: 98.1. No opportunity of being heard is required before an FIR is lodged and registered. 98.2. Classification of an account as fraud not only results in reporting the crime to the investigating agencies, but also has other penal and civil consequences against the borrowers. 98.3. Debarring the borrowers from accessing institutional finance under Clause 8.12.1 of the Master Directions on Frauds results in serious civil consequences for the borrower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the High Courts), or where the Appellant-CBI was not even impleaded as a party-respondent before the High Courts. 12. It is pertinent to mention that the administrative actions initiated in pursuance of the RBI's Master Directions were set aside only on the ground of nonadherence to the principle of Audi Altarem Partem and not on merits. Setting aside of an administrative action on the grounds of violation of the principles of natural justice does not bar the administrative authorities from proceeding afresh. State Bank of Patiala v. S.K. Sharma, (1996) 3 SCC 364 "33. We may summarise the principles emerging from the above discussion. (These are by no means intended to be exhaustive and are evolved keeping in view the context of disciplinary enquiries and orders of punishment imposed by an employer upon the employee): xxx xxx xxx (5) Where the enquiry is not governed by any rules/regulations/statutory provisions and the only obligation is to observe the principles of natural justice - or, for that matter, wherever such principles are held to be implied by the very nature and impact of the order/action - the Court or the Tribunal should make a distinction between a t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "audi alteram partem", that is, "hear the other side". At times and particularly in continental countries, the form "audietur et altera pars" is used, meaning very much the same thing. A corollary has been deduced from the above two rules and particularly the audi alteram partem rule, namely "qui aliquid statuerit, parte inaudita altera acquum licet dixerit, haud acquum fecerit" that is, "he who shall decide anything without the other side having been heard, although he may have said what is right, will not have been what is right" [see Boswel's case [(1605) 6 Co Rep 48b : 77 ER 326] (Co Rep at p. 52-a)] or in other words, as it is now expressed, "justice should not only be done but should manifestly be seen to be done". Whenever an order is struck down as invalid being in violation of principles of natural justice, there is no final decision of the case and fresh proceedings are left upon (sic open). All that is done is to vacate the order assailed by virtue of its inherent defect, but the proceedings are not terminated." (emphasis supplied) Hence, we clarify that there is no bar on the RBI or the Complainant-Banks to proceed afresh, by adhering to the principles of natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CBI v. RAJA SINGH KAPOOR AND ORS. 12. SLP Diary No. 49284/2024 - CBI AND ORS. v. ABHISHEK SOIN AND ANR. 13. SLP (Crl.) No. 881/2025 - CBI v. RAMAN KUMAR AGGARWAL AND ORS. 14. SLP Diary No. 60578/2024 - CBI v. NARESH MALHOTRA AND ORS. 15. SLP Diary No. 3564/2025 - CBI v. VIMAL KUMAR AND ORS. 16. SLP (Crl.) No. 6371 - 6374/2024 - CBI v. VIJAY SONI AND ORS. 17. SLP (C) No. 29120/2024 - STATE BANK OF INDIA v. MS BHARAT PAPERS LTD AND ORS. 18. SLP (Crl) No. 630/2025 - PUNJAB NATIONAL BANK v. SHALLU GUPTA AND ORS. 19. SLP (Crl) No. 635/2025 - PUNJAB NATIONAL BANK v. NARINDER CHUGH AND ORS. 20. SLP (C) No. 28055-28056/2024 - STATE BANK OF INDIA v. ISHWAR CHAND GOEL AND ORS. 21. SLP (C) No. 28057-28058/2024 - STATE BANK OF INDIA v. ABHISHEK SOIN AND ORS. 22. SLP (Crl) No. 16786/2024 - PUNJAB NATIONAL BANK v. NARESH MALHOTRA AND ORS. 23. SLP (C) No. 29119/2024 - STATE BANK OF INDIA v. RAMAN KUMAR AGGARWAL AND ORS. 24. SLP (Crl) No. 18396/2024 - PUNJAB NATIONAL BANK AND ANR. v. VIMAL KUMAR AND ORS. We set aside the impugned judgments and remit the matters in their original form to the High Court for fresh consideration on all issues, except the on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BACK TO THE HIGH COURT S. No. Case Title 1. SLP (Crl.) No.7748/2024 - CBI v. E. SUDHIR REDDY AND ORS. 2. SLP (Crl.) Nos. 15574 - 15575/2024 - CBI AND ANR. v. M/S BHARAT PAPERS LTD. AND ORS. 3. SLP (Crl.) Nos. 15572 - 15573/2024 - CBI v. PRANAV GUPTA AND ORS. 4. SLP (Crl.) No. 420/2025 - CBI v. GAUTAM GUPTA AND ORS. 5. SLP Diary No. 43552/2024 - CBI v. SUYOG JAIN AND ORS. 6. SLP (Crl.) No. 634/2025 - CBI v. GAUTAM GUPTA AND ORS. 7. SLP Diary No. 44000/2024 - CBI v. ASHOK KUMAR MIGLANI AND ORS. 8. SLP (Crl.) No. 18393/2024 - CBI v. NAVNEET GUPTA AND ORS. 9. SLP (Crl.) No. 18394 /2024 - CBI Vs. HAKAM CHAND JOSAN 10. SLP(C) No. 29120/2024 - STATE BANK OF INDIA v. MS BHARAT PAPERS LTD AND ORS. 11. SLP(Crl) No. 630/2025 - PUNJAB NATIONAL BANK v. SHALLU GUPTA AND ORS. 12. SLP (Crl) No. 635/2025 - PUNJAB NATIONAL BANK v. NARINDER CHUGH AND ORS. 13. SLP (C) No. 28059/2024 - STATE BANK OF INDIA v. HAKAM CHAND JOSAN AND ORS. 14. SLP (Crl) No. 16786/2024 - PUNJAB NATIONAL BANK v. NARESH MALHOTRA AND ORS. 15. SLP (C) No. 28184/2023 - PUNJAB NATIONAL BANK v. VIJAY SONI AND ANR. 16. SLP (C) No. 28231/2023 - PUNJAB NATIONAL BANK v. RAJIV SONI AND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Crl.) No.7748/2024 - CBI v. E. SUDHIR REDDY AND ORS. 3. SLP (Crl.) No. 14011/2024 - CBI v. MADANLAL GOYAL AND ORS. 4. SLP (Crl.) No. 13050 -13051/2024 - CBI v. NARINDER CHUGH AND ORS. 5. SLP (Crl.) Nos. 15574-15575/2024 - CBI AND ANR. v. M/S BHARAT PAPERS LTD. AND ORS. 6. SLP (Crl.) Nos. 15572-15573/2024 - CBI v. PRANAV GUPTA AND ORS. 7. SLP (Crl.) No. 420/2025 - CBI v. GAUTAM GUPTA AND ORS. 8. SLP Diary No. 44000/2024 - CBI v. ASHOK KUMAR MIGLANI AND ORS. 9. SLP Diary No. 43977/2024 - CBI v. BHAGWAN DASS GARG AND ORS. 10. SLP (Crl.) No. 18393/2024 - CBI v. NAVNEET GUPTA AND ORS. 11. SLP (Crl.) No. 18394 /2024 - CBI v. HAKAM CHAND JOSAN AND ORS. 12. SLP Diary No. 49283/2024 - CBI v. RAJA SINGH KAPOOR AND ORS. 13. SLP Diary No. 49284/2024 - CBI AND ORS. v. ABHISHEK SOIN AND ANR. 14. SLP (Crl.) No. 631/2025 - CBI v. KALARITHARA MICHAEL SEBASTINE AND ORS. 15. SLP Diary No. 60578/2024 - CBI v. NARESH MALHOTRA AND ORS. 16. SLP Diary No. 3564/2025 - CBI v. VIMAL KUMAR AND ORS. 17. SLP (Crl.) No. 6371-6374/2024 - CBI v. VIJAY SONI AND ORS. (RC0092022A0008) 18. SLP (Crl) No. 632-633/2025 - CBI v. KARNAL AGRICULTURAL INDUSTRIES PVT. LTD. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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