Wilful defaulter classification requires proof of Clause 3(d) conditions; non-executive director status alone is insufficient.

A non-whole time director cannot be classified as a wilful defaulter unless the exceptional conditions in Clause 3(d) of the RBI Master Circular are affirmatively shown on the record. The materials did not establish that the petitioner was a promoter; the record instead indicated non-executive director status, and the bank produced no independent proof of promoter role. Nor was there evidence of board minutes, awareness of default, consent, connivance, or other supporting material required for Clause 3(d). The Review Committee also failed to address the jurisdictional objection or give meaningful reasons. The wilful defaulter declaration was set aside and the CIC listing was directed to be reversed.

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Issues: (i) Whether the petitioner could be treated as a promoter of the borrower-company for the purpose of wilful defaulter classification; (ii) Whether the petitioner, as a non-whole time director, could be brought within Clause 3(d) of the RBI Master Circular on Wilful Defaulters and whether the Review Committee's declaration could stand without consideration of the jurisdictional objection and supporting material.

Issue (i): Whether the petitioner could be treated as a promoter of the borrower-company for the purpose of wilful defaulter classification.

Analysis: The materials relied upon did not establish that the petitioner was an original subscriber or promoter of the company. The references in the reply and in the subsequent communication were read in context and were not treated as admissions of promoter status. The record instead showed the petitioner as a non-executive director, and the bank failed to produce any independent document showing that he was a promoter.

Conclusion: The petitioner was not proved to be a promoter and had to be assessed as a non-executive director.

Issue (ii): Whether the petitioner, as a non-whole time director, could be brought within Clause 3(d) of the RBI Master Circular on Wilful Defaulters and whether the Review Committee's declaration could stand without consideration of the jurisdictional objection and supporting material.

Analysis: Clause 3(d) required a rare case showing awareness of wilful default from board minutes, non-recording of objection, or consent or connivance. No board or committee minutes, no material of awareness, and no proof of consent or connivance were shown. The Review Committee also failed to deal with the petitioner's jurisdictional objection and gave no meaningful reasons or incriminating material to sustain the declaration. The petitioner was not shown to be on the audit committee, and the parity issue reinforced the absence of any differentiated basis for the adverse finding.

Conclusion: The declaration of the petitioner as a wilful defaulter could not be sustained.

Final Conclusion: The impugned wilful defaulter declaration was set aside and the petitioner's name was directed to be removed from the CIC list, with consequential steps for reversal of the adverse action.

Ratio Decidendi: A non-whole time director cannot be branded a wilful defaulter unless the exceptional conditions in Clause 3(d) of the RBI Master Circular are affirmatively established on the record by reasoned consideration and supporting material.

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