The HC affirmed that principles of natural justice, specifically...

The HC affirmed that principles of natural justice, specifically audi alteram partem, apply to proceedings under RBI Directions regarding fraud classification. Following Rajesh Agarwal (SC), the court held that borrowers must be afforded an opportunity of hearing before their accounts are classified as fraud, given the significant civil consequences that follow such classification. The court clarified that this principle requires not only allowing written representations but also providing personal hearings to affected parties. The impugned direction by the Single Judge mandating such hearings was upheld as proper implementation of natural justice principles. The Letters Patent Appeal challenging this direction was accordingly dismissed.