Natural justice requires disclosure of foundational documents before responding to fraud classification show-cause notices.

A meaningful reply to a show-cause notice cannot be expected unless the material relied on is disclosed to the noticee. Where proposed fraud classification depends on documents not supplied with the notice, fair procedure and natural justice require inspection of the relevant records and supply of the specific foundational documents before any reply is demanded. Because fraud classification carries serious civil consequences, the noticee must be given a real opportunity to examine the records and respond. The petitioner was therefore entitled to inspect the relevant company records held with the lead bank and the resolution professional, receive the identified documents, and then file a reply.

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Issues: Whether the petitioner, against whom show-cause notices were issued for proposed classification of the account as fraud, was entitled to inspection and disclosure of the documents forming the basis of those notices before being required to submit a reply.

Analysis: The notices alleged irregularities in the loan account, but the supporting records were not furnished with the notices. The records were stated to be partly with the lead bank and partly with the resolution professional after commencement of insolvency proceedings. The governing principle is that a meaningful reply to a show-cause notice cannot be expected unless the material relied upon is made available to the noticee. Fair procedure and the principles of natural justice require disclosure of the foundational documents, because otherwise the notice-and-reply process becomes an empty formality. Since classification of an account as fraud carries serious civil consequences, the noticee must be given a real opportunity to inspect the relevant records and respond.

Conclusion: The petitioner was entitled to inspection of the relevant company records with the lead bank and the resolution professional, followed by supply of the specific documents identified from those records and an opportunity to file a reply thereafter.

Final Conclusion: The petition was disposed of by granting a limited procedural safeguard to enable an effective response to the fraud notices, while leaving the notices themselves to be dealt with in accordance with law after disclosure and reply.

Ratio Decidendi: Where a show-cause notice is founded on documents not supplied to the noticee, principles of natural justice require disclosure of those foundational materials and a meaningful opportunity to inspect and respond before adverse action is considered.

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