TaxTMI 
TaxTMI 
2019 (4) TMI 1627
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....petitioner was issued a show cause notice, and the petitioner replied thereto, the authorities failed to take into account the true net owned fund available to the petitioner as at March 31, 2017. He refers to the definition of "net owned fund" as contained in 45-IA (7) of the Act of 1934. He also refers to the certificate issued by the statutory auditors of the petitioner as at March 31, 2017 which was submitted with RBI. According to him, in the event the total net owned fund is calculated by taking into account the paid-up share capital of the petitioner and the total assets available to the petitioner then, the net owned fund available to the petitioner would be in excess of Rs. 200 lakhs (Rs.2 crores) as on March 31, 2017. RBI requires....
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....he certificate of registration had been issued to it; or (iii) at any time fails to fulfil any of the conditions referred to in clauses (a) to (g) of sub-section (4); or (iv) fails- (a) to comply with any direction issued by the bank under the provisions of this Chapter; or (b) to maintain accounts in accordance with the requirements of any law or any direction or order issued by the bank under the provisions of this Chapter; or (c) to submit or offer for inspection its books of accounts and other relevant documents when so demanded by an inspecting authority of the bank; or (v) has been prohibited from accepting deposit by an order made by the bank under the provisions of this Chapter a....
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....... ... ..." The second proviso to Section 45-IA (6) requires the authorities to give a reasonable opportunity of hearing to the delinquent before making an order of cancellation of certificate of registration. This provision was considered in M/s. Nahar Finance and Leasing Limited (supra). It was held that, RBI ought to have afforded an oral hearing before taking a decision. In the facts of the present case, the petitioner was issued a show cause notice, to which the petitioner replied in writing. In its reply, the petitioner acknowledged that there was default on the part of the petitioner in meeting the requirement of having a net owned fund of Rs. 200 lakhs as at March 31, 2017. Principles of natural justice do not require that, a....
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....cial companies to achieve net owned fund of Rs. 200 lakhs as on March 31, 2017. It is an admitted position that, the petitioner did not achieve such net owned fund as on March 31, 2017. The petitioner takes a different stand in the present writ petition. It now contends that, if the value of the total assets are taken into consideration, then, the net owned fund available to the petitioner would be far in excess of the stipulated quantum. In advancing the contention that, net owned fund available to the petitioner is in excess of Rs. 1.73 crores as on March 31, 2017 the value of the total assets available to the petitioner as on March 31, 2017 is sought to be taken into consideration. With respect, the value of the total assets by itself....