TaxTMI 
TaxTMI 
2020 (8) TMI 26
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....by the Respondent to declare the Petitioners as Wilful Defaulters under the Master Circular; b) Issue a writ of Mandamus or any other appropriate writ, order, or direction in the nature thereof, restraining the Respondent from reporting the names of the Petitioners to the Reserve Bank of India, credit rating agencies or any other third party as "wilful defaulters" under the Master Circular; In the alternative, assuming that the Respondent has already reported the names of the Petitioners to the Reserve Bank of India, credit rating agencies or any other third party as "wilful defaulters", issue a writ of Mandamus or any other appropriate writ, order, or direction in the nature thereof directing the Respondent to cause deletion of their n....
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.... 5. The grievance of the petitioners was that the respondent bank was not giving access to the underlying documents to the petitioners. The petitioners were constrained to file the writ petition being W.P.(C) No.11577/2019 challenging the notice. A direction was passed in the writ petition dated 01.11.2019 that the respondent bank will furnish all such documents on which they seek to place reliance. 6. It is the grievance of the petitioners that all the documents relied upon by the respondent in the notice in question have not been supplied to the petitioners. However, on 13.11.2019, a notice was received by the petitioners asking the petitioners to appear for a personal hearing on 29.11.2019. It is strongly urged that despite several att....
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.... with the Master Circular on Wilful Defaulters dated 01.07.2015, and the directions given by the Supreme Court in the case of State Bank of India v. M/s Jah Developers Pvt. Ltd. & Ors., 2019 (6) SCC 787. 10. Learned counsel for the respondent however states that the respondent bank has complied with the legal position as stated by the Supreme Court in State Bank of India v. M/s Jah Developers Pvt. Ltd. & Ors.(supra). It has also been stressed by the learned counsel for the respondent that the observations of the Supreme Court in the afore-noted judgment pertain to the Master Circular dated 01.07.2013, which circular has been revised on 01.07.2015 and the respondent has complied with the circular of 01.07.2015. 11. In this context referenc....
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....Committee need not be set up to review such decisions. xxxxx." 12. Similarly, the Supreme Court in State Bank of India v. M/s Jah Developers Pvt. Ltd. & Ors.(supra) held as follows: "24. Given the above conspectus of case law, we are of the view that there is no right to be represented by a lawyer in the in-house proceedings contained in paragraph 3 of the Revised Circular dated 01.07.2015, as it is clear that the events of wilful default as mentioned in paragraph 2.1.3 would only relate to the individual facts of each case. What has typically to be discovered is whether a unit has defaulted in making its payment obligations even when it has the capacity to honour the said obligations; or that it has borrowed funds which are diverted f....
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....e Committee comprising of the Executive Director and two other senior officials, being the First Committee, after following paragraph 3(b) of the Revised Circular dated 01.07.2015, must give its order to the borrower as soon as it is made. The borrower can then represent against such order within a period of 15 days to the Review Committee. Such written representation can be a full representation on facts and law (if any). The Review Committee must then pass a reasoned order on such representation which must then be served on the borrower. Given the fact that the earlier Master Circular dated 01.07.2013 itself considered such steps to be reasonable, we incorporate all these steps into the Revised Circular dated 01.07.2015. The impugned judg....
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.... reported to RBI and also published on our Bank's website. 3. That our Bank having the right to publish your (wilful defaulters') photographs in public domain has published the photographs." 15. A perusal of the above order dated 16.03.2020 shows that it is communicated by the DGM. It is presumably passed by the Review Committee. Procedure adopted by the respondent is wholly contrary to the mandate stated by the Supreme Court in the above noted judgment. Firstly, it is not a reasoned order. Secondly, the order of the First Committee was never communicated to the petitioners. The net result is that the petitioners never had an opportunity to make a representation against the order of the First Committee to the Review Committee. There is c....