Reasoned review in wilful defaulter cases must be independent; unreasoned committee orders can be quashed.

Under the Wilful Defaulters Master Circular, the Review Committee must independently consider the borrower's representation and issue a reasoned order after applying its own mind. The later declaration in Jah Developers was treated as an exposition of the existing procedure, so it applied to pending challenges to earlier review decisions. Here, the Review Committee merely repeated the Identification Committee's view, without recording reasons or meaningfully addressing the petitioners' case. The challenge was confined to the review stage, so the earlier Identification Committee stage was left undisturbed and the Review Committee's order was quashed, with the matter directed to proceed from the Identification Committee stage.

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Issues: Whether the Review Committee's order declaring the petitioners as wilful defaulters could be sustained when it did not record reasons and did not meaningfully deal with the representation before it, and whether the legal position declared in Jah Developers could be applied to review decisions made before that judgment.

Analysis: The Master Circular on Wilful Defaulters contemplates a two-tier decision-making process, beginning with the Identification Committee and followed, if required, by review by the Review Committee. The Review Committee is required to consider the borrower's representation and pass a reasoned order. A later judicial declaration of the procedure required under the circular is not a new law but an exposition of the existing legal position, and therefore applies to pending challenges to earlier decisions as well. In the present matter, the Review Committee's order merely echoed the earlier finding and did not disclose independent reasons or proper application of mind to the petitioners' case. The challenge was confined to the Review Committee's decision, and the petitions did not effectively seek quashing of the Identification Committee's order or the underlying process up to that stage.

Conclusion: The Review Committee's order was unsustainable and was quashed. The matter was directed to proceed from the stage of the Identification Committee, leaving the earlier stage undisturbed.

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