TaxTMI 
TaxTMI 
2024 (7) TMI 1165
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....PPL. 34954/2024 3. The present petition has been filed seeking directions for setting aside Show Cause Notice ("SCN") dated 20th February, 2024, issued by respondent no. 1-State Bank of India ("SBI"), directing the petitioner to show cause as to why its account/name should not be categorized and reported as "Fraud", as per Reserve Bank of India ("RBI") Guidelines. There is further prayer for directions to respondent no. 1-SBI, to allow inspection, and furnish all supporting/relied upon documents in the SCN dated 20^th February, 2024. 4. Learned counsel for the petitioner submits that the respondent bank has failed to substantiate the allegations in the SCN, without any evidence whatsoever supporting such allegations. The petitioner re....
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....g documents that had been relied upon in the SCN. 8. The respondent no. 1-bank replied to the said E-mail on 08th May, 2024, providing some of the supporting documents, but failed to provide all the documents relied upon in the SCN. Thus, there were some more exchange of communications between the parties, wherein, the petitioner time and again requested for supply of all the requisite documents. 9. Thus, it is the case on behalf of the petitioner that the respondent no. 1-SBI has made several allegations against the petitioner, however, has failed to provide the petitioner, with all relevant documents, as relied upon in the impugned SCN. Learned counsel appearing for the petitioner relies upon the judgment of Supreme Court in the cas....
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....al Investigation Report dated 18th January, 2024, only the conclusions were provided. Therefore, he submits that the petitioner ought to be provided all the underlying documents, as relied in the SCN, and comply with the Principles of Natural Justice. 14. I have heard learned counsels for the parties and have perused the record. 15. The main grievance as raised by the petitioner, in the present petition is with regard to non-supply of relevant documents that have been relied by the respondent no. 1-bank, at the time of issuance of the impugned SCN. The said dereliction is a serious one, as without supplying the documents that have been relied upon in the said SCN, it would not be possible to give an effective and proper reply to the s....
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.... 31. The concept of fairness may require the adjudicating authority to furnish copies of those documents upon which reliance has been placed by him to issue show-cause notice requiring the noticee to explain as to why an inquiry under Section 16 of the Act should not be initiated. To this extent, the principles of natural justice and concept of fairness are required to be read into Rule 4(1) of the Rules. Fair procedure and the principles of natural justice are in-built into the Rules. A noticee is always entitled to satisfy the adjudicating authority that those very documents upon which reliance has been placed do not make out even a prima facie case requiring any further inquiry. In such view of the matter, we hold that all such docu....
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.... us closer to identifying the extent of required disclosure. There are three key purposes that disclosure of information serves: 28.1. Reliability: The possession of information by both the parties can aid the courts in determining the truth of the contentions. The role of the court is not restricted to interpreting the provisions of law but also determining the veracity and truth of the allegations made before it. The court would be able to perform this function accurately only if both parties have access to information and possess the opportunity to address arguments and counter-arguments related to the information. 28.2. Fair trial: Since a verdict of the Court has far-reaching repercussions on the life and liberty of a....
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.... but is also towards fulfilling the larger institutional purpose of fair trial and transparency. Since the purpose of disclosure of information targets both the outcome (reliability) and the process (fair trial and transparency), it would be insufficient if only the material relied on is disclosed. Such a rule of disclosure, only holds nexus to the outcome and not the process. Therefore, as a default rule, all relevant material must be disclosed. xxx xxx xxx" 11. In view of the aforesaid, it is imperative that the relevant documents that form the basis of issuance of a SCN, ought to be provided to the concerned party in order to enable such a party to raise its defense effectively. Such fundamental right of a party cannot ....