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2025 (12) TMI 1485
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....ation (L) No. 37575 of 2025 and Interim Application (L) No. 37574 of 2025. * Mr. Mayur Khandeparkar a/w Mr. Ameet Naik, Mr. Abhishek Kale, Mrs. Madhu Gadodia, Mr. Devashish Jagirdar, and Mr. Ronit Doshi, Advocates for Plaintiff in Suit (L) No. 37862 of 2025 and Applicants in Interim Application (L) No. 37865 of 2025 and Interim Application (L) No. 37868 of 2025. * Mr. Zal Andhyarujina, Senior Advocate a/w Ms. Akansha Agarwal, Mr. Babu Sivaprakasam, Ms. Nandita Bajpai, Ms. Rahat Kalptri and Mr. Vijay Srinivasan, Advocates i/by Yogesh Pirtani for Defendant No. 1 in Suit (L) No. 35923 of 2025 and Respondent No. 1 in Interim Application (L) No. 35924 of 2025. * Mr. Zarir Bharucha, Senior Advocate a/w. Mr. Rishi Thakur and Ms. Dhwani Gala, Advocates for Defendant No. 1 in Suit (L) No. 37573 of 2025. * Mr. Kevic Setalvad, Senior Advocate a/w. Mr. Jeehan Lalka, Mr. Nishit Dhruva, Ms. Niyati Merchant and Ms. Rajlaxmi Pawar, Advocates i/by MDP Legal for Respondent No. 1 in Suit (L) No. 37862 of 2025 and Applicants in Interim Application (L) No. 37868 of 2025 and Interim Application (L) No. 37865 of 2025. * Mr. Kunal Dwarkadas, a/w. Mr. Rahul Dwarkadas, Ms. Prachi Dhanani, Mr.....
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....fore classifying a person as a "Fraud". 3.2. He would submit that in June 2017, Joint Lenders' Forum (for short "JLF") of which Defendant No. 1 - Bank is a Member considered appointment of an Audit firm for Forensic Review of RCOM, RTL and RITL. He would submit that Banks were primarily interested in recovery of their dues through sale of assets of the said Companies. 3.3. He would submit that in September 2017, Ericsson Indian Pvt. Ltd. filed Company Petition against RCOM. He would submit that on 15.05.2018 RCOM was admitted into Corporate Insolvency Resolution Process (for short "CIRP") by National Company Law Tribunal and the Board of Directors stood superseded by the Resolution Professional. 3.4. He would submit that, in the meanwhile, on 07.05.2019, State Bank of India (for short "SBI") as the lead lender of the consortium appointed Defendant No. 2 - BDO LLP as Forensic Auditor. He would submit that on 15.10.2020, Defendant No. 2 - BDO LLP submitted Forensic Audit Report (for short "FAR") to SBI. He would submit that on 19.01.2021, Plaintiff's erstwhile Advocates addressed letter to Defendant No. 2 - BDO LLP seeking clarification on the FAR. He would submit that on 03....
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....ubmit that a profile verification revealed that Defendant No. 3, the author and sole signatory of the FAR is not a Chartered Accountant (for short "CA") and did not hold a Certificate of Practice as CA and was not a Member of ICAI. 3.8. He would submit that Clause 4.1 read with Footnote 14 of the 2024 RBI Master Directions mandates Forensic Audit must be conducted by an Auditor who is qualified as Auditor under the relevant statutes. He would submit that the FAR prepared by Defendant No. 2 - BDO LLP is not an entity competent to conduct the External Audit. He would submit that the Report prepared by Defendant No. 2 - BDO LLP does not bear the signature of a Chartered Accountant Partner who has acted in preparation of the Report as mandated by law. He would submit that Defendant No. 2 is the author and sole signatory of the Report and admittedly he is not a CA. He would submit that Show Cause Notice issued by Defendant No. 1 - IOB is founded solely on the said Report and therefore it cannot be sustained in law. He would submit that Sections 2(b), 2(e) and 6 of the Chartered Accountants Act, 1949 restrict audit practice to ICAI - registered Chartered Accountants holding valid Cert....
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....age Auditors for external audit strictly in accordance with law. He would submit that considering IBA's or for that matter SEBI's empanelment as sufficient would amount to delegating RBI's statutory mandate to a non-statutory private body like IBA which is impermissible in law and render the provisions of the Companies Act, 2013 nugatory. He would argue that from the above conduct there is a clear malice in law on the part of Defendant No. 1 to rely on such a Report which does not prima facie meet the statutory compliances and qualifications of its author. 3.12. He would submit that the Report if read is nothing but inconclusive, incomplete and error-ridden. He would submit that Defendant No. 2 - BDO LLP in its reply through its Advocate has categorically confirmed that no conclusion of fraud or breach of trust is drawn in the said Report qua the Plaintiff's 3 Companies' accounts which were investigated. He would submit that Defendant Nos.1 and 2 have not refuted this in their reply filed to the Interim Application neither dealt with it or clarified the same. He would submit that the entire exercise of preparing the Report is rendered futile as only 24 CA Certificates are review....
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.... Companies Act, 1956 wherein there was a specific provision which stated that Auditor appointed shall not be qualified as Auditor of the Bank unless he is a Chartered Accountant. 3.17. He would submit that the same provision has transitioned into Section 141(1) and (2) read with Section 145 of the Companies Act, 2013 which is the relevant statute for consideration. He would submit that if argument of the Banks is to be accepted then there will be two different yardsticks of eligibility, viz; one under the 2016 RBI Master Directions and second under the 2024 RBI Master Directions for determining qualification of External Auditor. He would submit that External Auditor will have to be a person having the basic minimum requisite qualification of Chartered Accountant for Audit as envisaged by the relevant statutes. 3.18. He would submit that in Writ Petition No. 3037 of 2025, SBI relied upon the same FAR, but the contention of competency, validity and qualification of the author of the Report and its signatory qua the 2024 RBI Master Directions was not raised, neither argued nor adjudicated by the Division Bench however it was permitted only because the circular therein was held t....
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....rust was arrived at in the FAR qua the Plaintiff's Companies' Accounts. 4.3. He would fairly inform that in the meanwhile Plaintiff filed Writ Petition (L) No. 34065 of 2025 against IDBI Bank seeking deferment of personal hearing, however on 28.10.20205 the said Petition was withdrawn reserving liberty to raise all contentions. 4.4. He would refer to and rely upon the decision of the Calcutta High Court in the case of Prashant Bothra and another Vs. Bureau of Immigrations and Others 2023 SCC Online Cal 2643 (in support of Plaintiff's case) and another decision of this Court in the case of Ankit Bhuwalka Vs. IDBI Bank and Another 2025 SCC OnLine Bom 96 wherein Paragraph No. 26 in the case of Ankit Bhuwalka (supra) is relevant and reproduced hereunder:- "26. It is thus clear from the table that the position of the borrower as relied upon by the wilful defaulter committee is as per the transaction review report dated March 5, 2020 prepared by the auditor M/s. G.D. Apte and Co. At the cost of repetition, it is necessary to note that the resolution professional had made an application before the National Company Law Tribunal bearing I.A. No. 133 of 2020 under section 60 r....
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....tes addressed letter dated 19.01.2024 requesting copies of all documents relied upon to prepare the FAR and Plaintiff received the FAR vide letter dated 27.06.2024. 5.2. He would submit that Plaintiff filed Writ Petition (L) No. 9342 of 2025 challenging Show Cause Notice issued by Defendant No. 1 however he withdrew the same on 17.04.2025. He would submit that on 02.09.2025 Defendant No. 1, placing sole reliance on FAR, issued Fraud Classification Order against Plaintiff which was challenged in Writ Petition (L) No. 29095 of 2025 wherein vide order dated 17.09.2025 Defendant No. 1 undertook not to act in furtherance of Fraud Classification Order. He would submit that it is case of Defendant No. 1 - Bank of Baroda that SEBI has empanelled Defendant No. 2 as Forensic Auditor however he would submit that the same has no bearing on the present Suit as SEBI is a Market Regulator and not a Banking Regulator and appointment of Auditor whether internal or external by Banks is governed by the relevant statutes and the RBI Master Directions on Fraud. 5.3. He would submit that Defendant No. 2 admittedly is not a CA as contemplated by Section 4(2) of the Chartered Accountants Act, 1949. ....
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....ll along aware of the classification of RCOM account as fraud since then and therefore filing of the present suit in the year 2025 is barred by limitation on the face of record. 6.1. He would submit that Plaintiff filed several judicial proceedings in Court in the year 2024 and 2025 to challenge determination of fraud wherein he failed to secure any relief. He would in his usual fairness submit that though the ground on which interim relief is sought namely qualification and competency of the Auditor it was never challenged, agitated by Plaintiff or dealt with in any previous proceedings in Court, however Plaintiff cannot deny the fact that he was not aware of the competence of Defendant No. 2 and qualification of Defendant No. 3 since the year 2020 and further this Court has taken cognizance of the FAR and Plaintiff has failed to raise challenge on the aforesaid grounds in these proceedings. 6.2. That apart he would submit that Plaintiff fully participated in the enquiry conducted by Defendant No. 1 bank which is borne out by extensive correspondence during the years 2024 and 2025 but never objected to the competency and qualification of the Auditor. He would submit that Def....
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....the choice of the bank to appoint a Forensic Expert for conducting Forensic Audit. While referring to Clause No. 8.9.5 of the 2016 RBI Master Directions he would fairly submit that a precise timeline has been laid down for not only completion of Forensic Audit but also to determine fraud classification within 6 months of the early detection of one or two EWS. He would submit that 2016 RBI Master Directions refer to Audit in the widest possible sense which can be conducted by several rather a multitude of different types of professionals and does not prescribe qualification of CA for the External Auditor. 6.5. Thereafter he would submit that 2014 Directions supersede the 2016 RBI Master Directions but with a caveat that all actions legitimately undertaken under the 2016 RBI Master Directions can be continued. He would submit that the 2024 RBI Master Directions provide for following the principles of natural justice before determination of fraud which would include personal hearing to be given to the borrower which in the present case has been offered not once but twice. He would submit that 2024 RBI Master Directions have a well laid out regime permitting the Bank to conduct E....
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....into the same. He would submit that Plaintiff failed to raise challenge to the FAR in several previous proceedings and therefore he is precluded from raising the same in the present proceedings. 6.8. He would submit that the Plaint is conspicuously silent on the issue of declaration of fraud. He would submit that Defendant No .1 Bank had as far back as on 21.12.2020 taken the statutory steps to declare and upload the Fraud Monitoring Return qua Plaintiff company RCOM on the Extensible Business Reporting Language platform (for short "XBRL") of the RBI after Defendant No. 2 submitted the FAR on 15.10.2020 observing many major irregularities and thus the fraud came to light. He has drawn my attention to the said document appended at page No. 181 Exhibit "F" of the reply of Defendant No. 1 to the Interim Application. 6.9. He would submit that Master Directions are a form of delegated legislation and in the present case even though 2024 RBI Master Directions state that the previous RBI Master Directions are repealed, it is not so in the present case. 6.10. He would submit that 2016 RBI Master Directions are not expressly repealed by the 2024 RBI Master Directions. He would subm....
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.... show-cause notices by Banks and render all action for effecting recovery null and void. He would submit that in so far as Footnote 14 is concerned, the 2024 RBI Master Directions will have to be considered as explanatory and clarificatory for the purpose of consolidation of the substantive directions contained in the previous 2016 RBI Master Directions and hence it will have to be considered as a substantive change. 6.18. Mr. Andhyarujina has referred to and and relied upon the decision of the Supreme Court in the case of Zile Singh Vs. State of Maharashtra and Ors. (2004) 8 Supreme Court Cases 1 to contend that unless there are specific words stated in the statute to show the intention of the legislature, the statute will have to be determined as prospective in application only. He would submit that qualification of the External Auditor rendered vide Footnote 14 in 2024 RBI Master Directions will have to be therefore considered as a substantive change and it cannot be merely considered to be explanatory or clarificatory. Paragraph Nos.13 to 18 of the aforesaid judgment are relevant in this regard according to him and are reproduced below:- "13. It is a cardinal princi....
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....y given, the courts may be called upon to construe the provisions and answer the question whether the legislature had sufficiently expressed that intention giving the statute retrospectivity. Four factors are suggested as relevant: (i) general scope and purview of the statute; (ii) the remedy sought to be applied; (iii) the former state of the law; and (iv) what it was the legislature contemplated. (p. 388) The rule against retrospectivity does not extend to protect from the effect of a repeal, a privilege which did not amount to accrued right. (p. 392) 16. Where a statute is passed for the purpose of supplying an obvious omission in a former statute or to "explain" a former statute, the subsequent statute has relation back to the time when the prior Act was passed. The rule against retrospectivity is inapplicable to such legislations as are explanatory and declaratory in nature. A classic illustration is the case of Attorney General v. Pougett [(1816) 2 Price 381 : 146 ER 130] (Price at p. 392). By a Customs Act of 1873 (53 Geo. 3, c. 33) a duty was imposed upon hides of 9s 4d, but the Act omitted to state that it was to be 9s 4d per cw....
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....the statutory basis of the decision. There is no fixed formula for the expression of legislative intent to give retrospectivity to an enactment. A validating clause coupled with a substantive statutory change is only one of the methods to leave actions unsustainable under the unamended statute, undisturbed. Consequently, the absence of a validating clause would not by itself affect the retrospective operation of the statutory provision, if such retrospectivity is otherwise apparent." 6.19. He has also relied upon the decision of Supreme Court in the case of Commissioner of Income Tax (Central)-I, New Delhi Vs. Vatika Township Private Limited (2015) 1 Supreme Court Cases 1 : (2014) 367 ITR 466 : 2014 SCC OnLine SC 712. in this regard. The relevant paragraph Nos. 27 to 31 therein read by him are reproduced below:- "27. A legislation, be it a statutory Act or a statutory rule or a statutory notification, may physically consists of words printed on papers. However, conceptually it is a great deal more than an ordinary prose. There is a special peculiarity in the mode of verbal communication by a legislation. A legislation is not just a series of statements, such as one find....
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....of case law available on the subject because aforesaid legal position clearly emerges from the various decisions and this legal position was conceded by the counsel for the parties. In any case, we shall refer to few judgments containing this dicta, a little later. 30. We would also like to point out, for the sake of completeness, that where a benefit is conferred by a legislation, the rule against a retrospective construction is different. If a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators' object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as retrospective. In Govt. of India v. Indian Tobacco Assn. [(2005) 7 SCC 396], the doctrine of fairness was held to be relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation. The same doctrine of fairness, to hold that a statute was retrosp....
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....his Court in Writ Petition (L) No. 9343 of 2025 in respect of the very same show-cause-notice which is the subject matter of challenge in the present Suit proceedings. He would next draw my attention to the proceedings in Writ Petition (L) No. 2905 of 2025 filed by Plaintiff in this Court once again for the very same cause of action i.e. to challenge the same Show Cause Notice and all consequential actions taken in furtherance thereof. He would submit that once such aforesaid multiple challenges for the same cause of action are maintained in the Writ Court, present Suit proceeding for the same reliefs are nothing but an abuse of the due process of law and on this count alone, Plaintiff is disentitled to interim relief. He would submit that there is no delay whatsoever on the part of Defendant No. 1 to issue the Show Cause Notice and a completely false case of urgency has been pleaded by Plaintiff seeking interim relief in paragraph No. 11 of the Suit Plaint by building a false narrative that Plaintiff was not aware of the FAR. He would submit that Plaintiff is not entitled to interim relief concerning the alleged cause of action stated in the Suit Plaint of having obtained the Repo....
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....ng failed to obtain reliefs for the past two years in a multitude of proceedings filed by him. He would submit that the Suit is hit by the bar of limitation since Plaintiff had knowledge about the FAR as far back as in 2021 and he chose not to challenge the same on the grounds of challenge in the present Suit proceedings and therefore the Interim Application seeking reliefs be dismissed with exemplary costs. 7.5. He would submit that SEBI as one of the market regulator does not require the Forensic Auditor to be a Chartered Accountant as Forensic Auditor can be an expert having expertise in the field of investigation and forensic auditing. He would draw my attention to the JLF decision at page No. 102 of the Bank's reply Affidavit wherein Plaintiff has been declared as fraud and substantial investigation is underway and therefore would vehemently persuade the Court to consider that if any interim relief is granted at this stage to Plaintiff, the entire investigation undertaken by the Law Enforcement Agencies will be derailed and set to naught. 7.6. He would submit that the only remedy therefore available to Plaintiff at this stage, considering the present facts and circumstan....
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....rring to the FAR prepared by BDO LLP before the Reserve Bank of India by his detailed complaint dated 22.03.2025 appended at page No. 710 Exh. "CC" to the Suit plaint wherein he did not question the competence and qualification of Defendant Nos. 2 and 3 and accepted the Report. He would submit that despite raising several grievances Plaintiff never raised any grievance whatsoever to challenge the competence and qualification of the Auditor in multiple proceedings. He would submit that by order dated 01.08.2025 Reserve Bank of India closed the complaint of Plaintiff and thus pursuant thereto on 02.09.2025 fraud classification Order was passed. He would submit that Writ Petition is filed by Plaintiff to challenge the fraud classification Order and in paragraph No. (f) thereof identical ground of challenge has been taken. 7.10. In view of above submissions, he would submit that since all along Plaintiff was fully aware of the External Auditor's qualification and credentials and he having filed multiple proceedings, he is now estopped from launching a fresh challenge in the present Suit proceeding on the same cause of action in law and the Court should not permit the same. 7.....
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....ction of Plaintiff has to be nipped in the bud itself. 7.15. He would submit that balance of convenience and prima facie case has not been made out and hence Plaintiff is disentitled to any interim relief. On the issue of irreparable loss, he would submit that grave consequences would follow if this Court grants interim relief to the Plaintiff since pursuant to the Show Cause Notice and fraud classification Order substantial steps have been taken in that direction and all those actions will stand overturned in the process and not only the Defendant No. 1 Bank but all members of the consortium who are lenders and who have suffered will be affected. Hence, he would submit that Plaintiff is not entitled to any interim relief whatsoever. 8. Mr. Bharucha, learned Senior Advocate appears for Defendant No. 1 - IDBI Bank in Suit (L) No. 37573 of 2025. In his usual fairness, at the outset, he would submit that he adopts the submissions and arguments canvassed by both the Learned Senior Advocates Mr. Andhyarujina and Mr. Setalvad. For brevity the same are not repeated and reiterated herein and they stand adopted as traversed. He would submit that in addition thereto and to the extent o....
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....about competency and qualification of the Forensic Auditor and he has filed the present Suit entirely on a new ground of which he was fully aware of during the last 5 years. Hence, he would submit that the Suit cannot maintain a challenge to the FAR either on merits or competency and no equities are created in favour of Plaintiff. He would therefore vehemently urge the Court to dismiss the Suit itself at the threshold with exemplary costs. 8.5. On the issue of merits, he would additionally submit that the 2024 RBI Master Directions do not invalidate either the Show Cause Notice or the process (including the Audit Report) initiated under the 2016 RBI Master Directions. He would submit that the Division Bench of this Court in the Plaintiff's own case i.e. Anil Ambani Vs. State Bank of India Writ Petition No. 3037 of 2025 has settled this issue. He would submit that the said judgment covers IDBI Bank's Show Cause Notice and the fraud proceedings. He would submit that the 2024 RBI Master Directions apply 'prospectively' and do not cover the process initiated and completed under the 2016 RBI Master Directions. He would submit that even otherwise, the Directions in the 201....
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.... - the borrower as "fraud account" based on Defendant No. 2's FAR and thus action is completed. He would submit that Plaintiff was RCOM's Promoter and thus in control of RCOM. He would submit that declaration as "Fraud" by order dated 29.10.2025 is not challenged rather Plaintiff has appeared before IDBI's Fraud Committee and made oral submissions for almost (two) 2 hours recently. 8.10. He would submit that even thereafter correspondence is exchanged with IDBI Bank seeking list of documents but no grievance or complaint is made alleging that the 2024 RBI Master Directions superseded the 2016 Directions or for that matter to challenge qualification of the Auditor. He would submit that it is in this background that present Suit is filed by Plaintiff now to seek a declaration that Show Cause Notice by IDBI Bank is bad in law after he having appeared at the personal hearing before the Committee, which should not be countenanced by Court. 8.11. On the basis of the above critical dates he would submit that Plaintiff's entire argument that IDBI's fraud proceedings rely on Defendant No. 2's FAR and that Defendant No. 2 is not an "Auditor' under the 2024 RBI Master Direct....
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.... process under old 2016 RBI Master Directions on Fraud has been completed both in respect of the principal borrower i.e., RCOM and Plaintiff no challenge can now be made to it on the ground that the 2024 RBI Master Directions on Fraud provide for a different process. 8.16. He would submit that Plaintiff's claim must fail since under both 2024 Master Directions and 2016 Master Directions, FAR need not be prepared by a statutory Auditor and is prepared merely for investigative purposes. He would submit that a statutory Auditor cannot undertake Forensic Audit within the meaning of Section 143 of Companies Act, 2013. 8.17. On the issue of Footnote 14 in the 2024 RBI Master Directions, he would submit that the same cannot be used by Plaintiff to qualify the main provision stated in the Directions. He would submit that its plain wording is not limited to the Companies Act, 2013 alone as the relevant statute but other Acts and Laws are also applicable, that the SEBI guidelines and Notification dated 02.09.2015 and more specifically sub Section 17 of Listing Obligations and Disclosure Requirement (for short "LODR") would also be applicable. In support of this submission he has referr....
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....uld not be reasonable to place him if the remedy were afterwards be asserted." (ii) The decision of the Supreme Court in the case of Chairman, State Bank of India and Anr Vs. M. J. James 2022 2 SCC 301, wherein reliance is placed on paragraph No. 41 relevant excerpt of which reads thus:- "41 it is, therefore, necessary for the court to consciously examine whether a party chosen to sit over the matter and has woken up to gain any advantage and benefit, which aspects have been noticed in Dehri Rohtas Light Railway Co. v. District Board, Bhojpur and State of Maharashtra v. Digambar. These facets, when proven, must be factored and balanced, even when there is delay and laches on the part of authorities." 8.20. He would submit that the Division Bench of this Court in the case of Anil Ambani (supra), specifically in paragraph No. 13 has held as under:- "13. ...there is no mention in the Master Directions 2024 relating to the validity of a SCN being issued prior to the said Directions. Issuance of a detailed SCN to give an opportunity to the borrower of being heard is the only sine qua non as per the Master Directions 2024. As long as the principles of natura....
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.... in a language which is fairly capable of either interpretation it ought to be construed as prospective only. In the absence of any express provision or necessary intendment the rule cannot be given retrospective effect except in the manner of procedure." 8.24. He would submit that the 2024 RBI Master Directions on Fraud cannot be interpreted to have retrospective effect. He would submit that the process (including the Show Cause Notice) initiated and concluded under the 2016 RBI Master Directions on Fraud cannot be impacted by the new 2024 RBI Master Directions. He would submit that Plaintiff's position that Defendant No. 2 must be an 'Auditor' in terms of the new Directions therefore must fail and cannot be countenanced as there is no clear provision in the new 2024 RBI Master Directions on Fraud, giving it retrospective effect. 8.25. In support of his above submissions, he has referred to and relied upon the decision of the Supreme Court in the case of Chandravathi P.K. and Ors. Vs. C.K. Saji 2004 3 SCC 734, more specifically on paragraph No. 34 therein which reads thus:- "34. ...the State in exercise of its power under Article 309 of the Constitution ....
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.... to the FAR on the ground of qualification of the author of the Report when no such impediment or requirement existed at the then time and more specifically so under the then prevailing 2016 RBI Master Directions. In the aforesaid background he would draw my attention to the Suit plaint and averments made therein pertaining to the purpose of filing the Suit qua Defendant Nos. 2 and 3 in paragraph nos 6.1 and 9.3 thereof. 9.2. He would submit that even according to Plaintiff in all 3 suit proceedings as stated in paragraph No. 9.4(iv) of the Suit plaint, Plaintiff has accepted the 2016 RBI Master Directions governing appointment of Defendant No. 2 as Auditor. Therefore he would submit that on the date of signing of the FAR and its submission to State Bank of India i.e. on 15.10.2020 there was no requirement prescribed under the 2016 RBI Master Directions for the author of the Report to be a CA. He would submit that it is only in the 2024 RBI Master Directions that there was a change in regime wherein clarification was issued under Footnote 14 for the first time for the External Auditor to be a CA under the relevant statutes. He would vehemently submit that in 2019 - 2020 there wa....
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....etence of the professional do not necessarily reflect qualification of the professional as a CA only. He would submit that what is stated in the Regulations is that the professional shall have the appropriate qualification to undertake FAR engagements. He would submit that it is stated therein that a CA qualification or post qualification certificate courses are ideal and global qualifications, certifications and such similar credentials carry requisite weight. 9.7. In the above background he would draw my attention to paragraph Nos. 33, 34, 37 and 38 in the Defendant No. 2's affidavit in reply. In these paragraphs the competency and skills of Defendant Nos. 2 and 3 have been stated. He would submit that Defendant No. 2 - BDO LLP is a Forensic Auditor Firm empanelled by the IBA for conducting Forensic Audit. He would submit that the 2016 RBI Master Directions admittedly permit special Forensic Investigations by Forensic Auditors and Defendant Nos. 2 and 3 are / were competent to conduct Forensic Audit and prepare FAR. He would submit that Defendant No. 3 was partner of Defendant No. 2 - BDO LLP firm at the then time who led the Audit assignment and authored and signed the FAR on....
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....swering Defendants. He would submit that Plaintiff's reliance on the 2024 RBI Master Directions is wholly opportunistic due to repeated failure met by Plaintiff in multiple judicial proceedings before filing the present Suits. In support of his submissions he would refer to and rely upon the following judgments apart of the compendium of Forensic Accounting and Investigations standard placed on record:- (i) In the cases of P Mahendran and Others Vs. State of Karnataka (1990) 1 SCC 411, A.A Carlton Vs. Director of Education and Another (1983) 3 SCC 33; he would rely on the well settled proposition of rule of construction that every statue or statutory rule is prospective unless expressly or by necessary implication made to have retrospective effect; (ii) In the case of Sri Vijaya Laxmi Rice Mills Vs. State of Andhra Pradesh (1976) 3 SCC 37 also delivered on the same proposition he would submit that it further upholds the principle that statutes cannot be construed to create new disabilities or obligations or impose new duties in respect of transactions that were complete at the time of the amending act coming into force. 9.11. By relying on the aforesaid 3 judgm....
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....ff Show Cause Notices issued by Defendant No. 1 Bank in all three Suit proceedings are issued on the basis of FAR dated 15.10.2020. Show Cause Notice in Bank of Baroda Suit proceeding is issued on 02.01.2024. Show Cause Notice in IDBI Suit proceeding is issued on 31.05.2024 whereas Show Cause Notice in Indian Overseas Bank Suit proceeding is issued on 02.12.2024. For the sake of interim relief, it is argued on behalf of Plaintiff that due to aforestated twin objections the Show Cause Notices and all consequential steps taken in furtherance thereof including declaring Plaintiff as "fraud" by one of the Bank be stayed forthwith. 13. Both parties, viz. Plaintiff and Defendants - Banks are ad idem on the issue that the reason and ground for maintaining challenge to the Show Cause Notice in the Suit proceedings namely on the basis of incompetency of Defendant No. 2 and qualification of Defendant No. 3 to prepare and sign the FAR has not been agitated previously in any proceedings neither decided by any Court in any proceedings qua the Plaintiff. Thus the issue of qualification and competency of Defendant Nos. 2 and 3 to prepare and submit the FAR is the question for determination for....
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....he relied upon documents on 10.03.2025 and thereafter Indian Overseas Bank has repeatedly scheduled personal hearing of Plaintiff which is not yet fructified. Plaintiff has in the present suit proceedings for the first time challenged Show Cause Notices and all consequential actions by Banks on the ground of competency and eligibility of Defendant No. 2 to prepare and submit the FAR and qualification of Defendant No. 3 not being a CA who has signed the FAR as partner of Defendant No. 2. 16. The entire thrust of Plaintiff's case is on Clause 4.1 of 2024 RBI Master Directions and Footnote 14 therein regarding Auditors who are qualified to conduct Audit under relevant statutes as applying to Plaintiff's case. Plaintiff's case is that relevant statutes as applicable would be provisions of Section 141(1), 142(2) and 145 of the Companies Act, 2013 read with Section 2(b), 2(c) and 6 of the Chartered Accountants Act, 1949 and the decision of the ICAI Council dated 01.07.2019 in its 379th Meeting which mandated that all Audit Reports carry the Unique Document Identification Number (UDIN). Provisions of Section 141(1), 141(2) and 145 of the Companies Act, 2013 and definitions ....
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....ibed.]" 17. Reliance is equally placed by Plaintiff on the contents of FAR and the Affidavit-in-Reply filed by Defendant No. 2 on behalf of Defendant Nos. 2 and 3 in reply to the Interim Applications for opposing interim relief. Defendant No. 2 has effectively admitted in the FAR that it is an accounting consulting firm, that FAR does not constitute an engagement to provide Audit, completion, review or attestation..., that it is not an opinion or testimony of expert witness, that it makes no representation about the suitability of the information in the Report and most importantly that it has not observed any fraud or criminal breach of trust as stated in its letter appended to the Suit plaint. It is not in dispute that Defendant No. 2 is not a firm of Chartered Accountants registered with the ICAI despite there being some CA partners at the then time having CA qualification and that the signatory of FAR i.e Defendant No. 3, the then partner of Defendant No. 2 not a qualified Chartered Accountant. 18. It is seen from the FAR that Defendant No. 2 is described therein as an "Accounting Consultancy Firm" whereas Defendant No. 3 has stated that he has not applied Auditing standar....
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....nt of the Defendant No. 2 as External Forensic Auditor. Banks have filed Affidavit-in-Reply annexing copy of appointment letter dated 07.05.2019 of Defendant No. 2 as Forensic Auditor to determine fraud angle examination through Forensic Audit of Reliance Communications (RCOM), Reliance Infratel (RITL) and Reliance Telecommunication Limited (RTL). All parties before me have argued that period to be covered for Audit was from 2013 to 2017 (i.e. 01.04.2013 to 31.03.2017). Even in the FAR period of Forensic Audit stated is from 2013 to 2017 (4 years). However a close scrutiny of the letter of appointment would reveal that Defendant No. 2 was appointed to conduct the Forensic Audit for the period F.Y. 2014 i.e. 01.04.2013 till date i.e. 07.05.2019. It is so stated in the appointment letter itself. Thus the FAR is not prepared and submitted as per the term and period for which it was to be prepared. Banks have argued before me that Defendant No. 2 was paid a staggering professional Audit fee of Rs. 65,00,000/- for the assignment plus GST @ 18% and costs of actuals separately. The appointment letter states that the timeline for completing the Audit was two months from the date of accepta....
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....tions for undertaking an External Audit. Neither any procedure or timeline was followed by the Lender Banks. It is clearly derivated that Defendant No. 2 was an interested party engaged by the Lender Banks in the consortium in undertaking the External Forensic Audit. The exercise of engaging an External Auditor for conducting Forensic Audit by Banks is to ensure that someone independent, neutral and duly qualified entity is appointed. Rather here is a case that BDO LLP i.e. Defendant No. 2 who was a Consultant engaged by the Lender Banks himself played a vital role in his own appointment which can be seen from the following excerpts of the Lenders Minutes of Meeting dated 01.03.2019 at Exhibit "D" to the Affidavit-in-Reply of the Banks:- "xxxxxx 1) Shri Padmakumar M. Nair, General Manager (Stressed Assets Resolution Group), SBI welcomed all the Lenders of the Company and the consultants." 8) Standard Chartered Bank also sought amendment to para no. 13(vi) of Minutes of the Meeting held on 21.02.2019. During the meeting BDO made a presentation of the amount of debt repaid to lenders over a period of May 2017 to March 2018. However, there was no discussion ....
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....e BDO LLP i.e. Defendant No. 2 before an even after the JLF Meeting held on 01.03.2019 can be clearly gauged from the above Minutes. Therefore from the above it is clearly concluded that BDO LLP was actively engaged by the Lender Banks well before his appointment, that he presented Report to the Lender Banks and advised them, that he himself suggested and requested for its own appointment as Forensic Auditor and was even otherwise later appointed as External Auditor. In view of this Defendant No. 2's appointment and independentness was undoubtedly compromised because of its association with all Lender Banks as a Consultant well before his appointment as Forensic Auditor. 25. From the material on record, it appears that Defendant No. 2 was already engaged with the Lender Banks as Consultant all throughout. A Forensic Auditor's independentness is extremely crucial for objectivity, ensuring that he is free from bias and external influence to investigate fraud impartially acting as a credible, unbiased expert for courts, boards, and all stakeholders and most importantly not advocating for any specific party but for the truth and for upholding professional standards. He must be free ....
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....l Auditor / Forensic Expert. Banks have vehemently argued that there is no qualification prescribed for the Forensic Expert appointed or that the Auditor appointed should be a practicing Chartered Accountant under relevant statutes and therefore appointment of Defendant No. 2 was in consonance with the then existing 2016 RBI Master Directions. 29. Contrary to the aforesaid submissions case of Plaintiff is that the 2024 RBI Master Directions, prima facie, and mandatorily superseded the earlier 2016 directions on the subject and provided a comprehensive and robust framework to the Banks for prevention, early detection and timely reporting of the incidents of fraud to Law Enforcement Agencies, Reserve Bank of India and for dissemination of information by RBI and matters connected therewith or incidental thereto but by preserving the structure for investigation and declaration as it was by consolidating the procedure. Banks have argued that for the first time Chapter 4 of 2024 RBI Master Directions gave a mandate to the Bank to use External Auditor or Internal Auditor as per its board approved policy for further investigation. Clause 4.1 is depicted with a footnote namely Footnote 1....
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....nsic Auditor as any unqualified person having vast experience can get appointed in that case at the discretion of the Bank. This is not permissible. 33. Section 141(2) of the Companies Act, 2013 envisages that only the Partners of a firm who are Chartered Accountants shall be authorized to act (mandatory to act and complete the audit) and sign on behalf of the firm (signatory of the audit report). Section 145 thereafter further fortifies that the person appointed as Auditor of the Company shall sign the Auditor's Report or sign or certify any other document of the Company in accordance with the provisions of sub- section (2) of section 141, and the qualifications, observations or comments on financial transactions or matters, which have any adverse effect on the functioning of the Company mentioned in the Auditor's Report shall be read before the Company in the General Meeting and shall be open to inspection by any Member of the Company. If Section 141(2) read with Section 145 has to apply to the present case then it is incumbent upon Defendant No. 2 appointed as Forensic Auditor to do External Audit through any of its Partner who is a Chartered Accountant and prepare the Au....
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....h Clause 8.8.2 it will be seen that Banks were permitted to appoint External Auditor including Forensic expert or its internal team for investigation before taking a final view of RFA in 2016 itself. It cannot be argued by Banks that appointment of External Auditor would be de-hors the relevant / applicable statutes and any entity merely having expertise in the field of forensic investigation can be considered for appointment. Use of word "External Auditor" itself signifies that the Auditor that the Bank may appoint will have to be in conformity with the relevant statutes because the Auditor will have to be qualified and conduct audit in accordance with law. 36. As per the Companies Act 2013 only a practicing Chartered Accountant is eligible to be appointed as statutory auditor of the Company. Needless to state that Chartered Accountants' firm can be appointed as auditor of the Company but such an appointment is possible exclusively when majority of the partners of the Firm are practicing Chartered Accountants and only a qualified CA partner signs the Audit Report. This statutory provision provides that a LLP can also be appointed as Auditor in its name but to qualify for th....
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....it is a specialized accounting field focused on investigating financial records for fraud, embezzlement or other financial crimes. It is seen that Forensic Audit covers a wide range of investigation activities and is often conducted to prosecute a party for fraud, embezzlement and other financial crimes. It is also seen that in the process of Forensic Audit the Auditor may be called to serve as an expert witness during the trial proceedings. In the present case, in this regard say of Defendant No. 2 in the Audit Report and its Affidavit-in-Reply becomes very relevant for adjudicating grant of interim relief. 39. In the Forensic Audit Report, Defendant No. 3 has stated as under:- (i) On internal page No. 2 of the FAR reference is made to Management comments / clarifications received by the Auditor uptil June 2020, when admittedly these comments were not received from the Management of the 3 Companies, but from the Resolution Professional; the Companies have denied being consulted at all; (ii) On the same page, it states that Defendant Nos. 2 and 3 accepts no responsibility or liability to a third party to whom the Report would be shown; If this is to be accepted....
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.... either for the purpose for which this engagement was sought or for any other. Findings are based on circumstantial evidence and partially concluded in the absence of adequate supporting / documents. Should additional information and documents be subsequently available, observations and change, and it may be necessary to revise our findings accordingly. We have relied on the information provided by the Banks and RCOM, RITL and RTL and our observations are based primarily on the review of such information. In respect of the Bank account statements of RCOM, RITL and RTL received in soft copy form, no statements of RCOM, RITL and RTL were not sufficient to ascertain the payee and nature of transaction. The nature of our work pertaining to conducting desktop search was based on the information available on public domain in India (and to the extent relevant, outside India). Information obtained was not subjected to independent verification by us. This Report does not constitute an engagement to provide audit, compilation, review, or attestation services made in accordance with the generally accepted auditing standards in India and, consequentily, no assurance ....
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....g supervision regime. 41. In the present case, it is seen that the RBI Master Directions are mandatory in nature and they operate within a binding statutory framework requiring banks to engage auditors strictly in accordance with applicable law. The Affidavit-in-Reply filed by Defendant No. 1 and Defendant No. 2 is completely silent on the aforementioned observations and findings in the FAR. It is seen that the Show Cause Notice issued to Plaintiff has been issued by the Bank after coming into force of the 2024 RBI Master Directions and if the said Show-Cause- Notice is on that basis, then it must comply with the 2024 RBI Master Directions in letter and spirit. In the present case a purposeful interpretation of qualification of Auditor will thereafter have to be made to harmoniously read it into the 2016 RBI Master Directions. 42. In so far as the internal statutory audit of the Company is concerned, the same is governed by the statutory provisions and therefore there cannot be a different standard made applicable for conducting the External Audit. The External Audit conducted by the Auditor will have to conform to the same and similar standard of qualification as an Internal....
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...., 34 and 37 are reproduced below:- "20. At this stage we may also note the definition of "rule" in Section 3(51) of the Act wherein it is provided that the term "rule" shall mean a rule made in exercise of a power conferred by an enactment and shall include a regulation made as a rule under any enactment. 31. We have carefully considered the decisions in Saurashtra Cement and Chemical Industries [(1993) 42 ECC 126 (Guj) (FB)] and Falcon Tyres case [(1992) 60 ELT 116 (Kant)] Though the judgments in these cases were rendered after the decision of the Constitution Bench in Rayala Corpn. (P) Ltd. [(1969) 2 SCC 412 : (1970) 1 SCR 639] a different view has been taken by the High Courts for the reasons stated in the judgments. The Full Bench of the Gujarat High Court in Saurashtra Cement and Chemical Industries [(1993) 42 ECC 126 (Guj) (FB)] as it appears from the discussions in the judgment, tried to distinguish the decision of the Constitution Bench in Rayala Corpn. [(1969) 2 SCC 412 : (1970) 1 SCR 639] for reasons, we are constrained to say, not sound in law. The decision of the Constitution Bench is directly on the question of applicability of Section 6 of the ....
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.... statute must be considered as a law that never existed. To this rule, an exception is engrafted by the provisions of Section 6(1). If a provision of a statute is unconditionally omitted without a saving clause in favour of pending proceedings, all actions must stop where the omission finds them, and if final relief has not been granted before the omission goes into effect, it cannot be granted afterwards. Savings of the nature contained in Section 6 or in special Acts may modify the position. Thus the operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceedings shall not continue but fresh proceedings for the same purpose may be initiated under the new provision." 45. Attention is also drawn to paragraph Nos.11 to 13 of the decision of this Court in the case of Anil Ambani Vs. State Bank of India wherein this Court has categorically....
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.... were followed before any declaration of fraud was made. Issuance of a detailed SCN was mandated. There is no mention in the Master Directions 2024 relating to validity of a SCN being issued prior to the said Directions. Issuance of a detailed SCN to give an opportunity to the borrower of being heard is the only sine qua non as per the Master Directions 2024. As long as the principles of natural justice are complied with and the doctrine of audi alteram partem is ensured, there is no violation of the Master Directions 2024 nor the directions issued by the Supreme Court in Rajesh Agrawal (supra). 13. Furthermore, mere conveying to the Banks, by way of a covering letter, that the Master Directions 2024 supersede the Master Directions 2016 will not render the SCN already issued by the SBI to the Petitioner, invalid. Thus, SBI was entitled to proceed pursuant to the impugned SCN issued prior to the Master Directions 2024, as long as principles of natural justice are complied with. The process initiated by SBI by issuing impugned SCN continues post 2024 Master Directions and the impugned SCN merges with the subsequent process. In this view of the matter, we are not inclined to ....
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....lated timeline of completing the declaration within six (6) months. 48. In the present case in 2019 the External Auditor is appointed to investigate the accounts pertaining to the period between 2013 and 2017. The RBI Master Directions are rendered completely redundant if this timeline is seen. It is seen that under the 2016 RBI Master Directions or even the 2024 RBI Master Directions once the Auditor is appointed he has to submit his Report within three months but in the present case it has taken an invariably long time of 17 months for submitting the FAR. It is seen that after the date of appointment despite two months having been granted to the Forensic Auditor to submit the Report, it has given a complete go by to the timeline stipulated or even prescribed in the Master Directions and submitted the FAR after more than 17 months. The Master Directions of RBI are not a mere paper tiger to enable the Banks to wake up from their deep slumber and initiate action according to their convenience. Had the concerned accounts of Plaintiff being Red Flagged on account of one or two EWS in the year 2013 itself or even thereafter and had the Banks acted strictly in consonance with the pre....
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....Because Banks handled large-scale transactions and rely heavily on technology, a Bank Audit places special emphasis on IT security, fraud detection and money laundering safeguards. By identifying potential weaknesses and recommending improvements, a Bank Audit upholds the institution's financial integrity and strengthens public confidence in the banking sector. If Banks themselves do not follow the Rule of Law and timelines as prescribed under the RBI Master Directions which is prima facie observed in the present case and take action at the right time it will affect the broader economy of the country. This is a classic case where the Banks have woken up from their deep slumber seeking to conduct Forensic Audit for the period from Audit 2013 and 2017 in the year 2019 without adhering to any of the timelines prescribed under the 2016 RBI Master Directions. 50. The clauses of Master Directions on Fraud must be interpreted in light of their purpose and objective i.e. timely indication and dissemination of information and repository about fraud. The Supreme Court in the case of Rajesh Agarwal (supra) holds that provisions of Master Directions on fraud must be construed keeping in min....
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.... fraud involves due application of mind to the facts and law by the lender banks. The lender banks, either individually or through a JLF, have to decide whether a borrower has breached the terms and conditions of a loan agreement, and based upon such determination the lender banks can seek appropriate remedies. Therefore, principles of natural justice demand that the borrowers must be served a notice, given an opportunity to explain the findings in the forensic audit report, and to represent before the account is classified as fraud under the Master Directions on Frauds." 54. The decision in the case of State Bank of India (supra) rendered by the Division Bench of this Court on 03.10.2025 in the Plaintiff's case relied upon the decision in the case of Rajesh Agarwal (supra) and mandated that personal hearing contemplated following principles of natural justice and also opportunity to make representation be followed. The result with respect to declaring Plaintiff as fraud or classification of the loan account of the Company as fraud would have very serious consequences. It would inevitably mean that the Promoters / Directors who are in control of the Company would be liable to pe....
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.... the earliest being in January 2024. There is substantial correspondence placed on record to this effect. Therefore, argument on limitation pleaded by banks cannot be prima facie countenanced. Once the Plaintiff had the complete report he has filed multiple proceedings in this Court but it is an admitted position which is not denied by the Banks that the issue regarding validity and legality of the FAR and qualification of the author and signatory of the Report was never challenged by Plaintiff in any of those proceedings. This issue as discussed above goes to the root of the matter. Once it is an admitted position that Defendant No. 3 is the sole author and signatory of the report and he is not a qualified Chartered Accountant though he may possess vast experience and hold certificates and citations from various Institutes around the world in the field forensic investigation, but he still does not qualify to be an Auditor within the requisite qualification under the relevant statutes to sign the FAR in India. Once this is the prima facie admitted position, there is absolutely no room for doubt and no matter whatsoever be concluded in the FAR, the FAR cannot be relied upon by the B....
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....a letter dated 03.02.2021 addressed by the Advocates of Defendant No. 2 to the erstwhile Advocates for Plaintiff. This letter is appended at page No.650 of the Suit plaint by Plaintiff. It is a very significant letter wherein in paragraph 'I' and 'J', it is stated as under:- "I. Our clients report deals with flow of funds and their designated end use and the responses received from management / relevant group of companies in respect thereof. It reports on whether or not such funds have been diverted / used / appropriated for purposes other than those stated. Our clients have not concluded / commented on any legal issues such as criminal breach of trust or commission of any offences. J. In order to ascertain where such funds ultimately landed, our client would have to undertake a forensic audit of such parties to whom the Relevant Group of Companies have transmitted such funds in the first instance which clearly was nos within the scope of work for our client. We would like to again make it clear that our client's report deals with the flow of funds and their designated end use. It reports on whether or not such funds have been diverted / used L appropriated fo....
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.... case Commissioner of Income Tax (Central)-I, New Delhi Vs. Vatika Township Private Limited (supra) in paragraph No. 29, the Supreme Court has held that legislation which modify accrued rights or which impose qualifications or impose new duties or attach new disabilities have to be treated as prospective unless the legislative intent is clear to give enactment a retrospective effect. However, the Supreme Court has further clarified therein that this can only be unless the legislation is for the purpose of supplying an obvious omission in a former legislation or to explain a former legislation. These words of the Supreme Court clearly echo and give answer to the Banks' case before me. The 2024 RBI Master directions is a legislation for the purpose of supplying an obvious omission / clarification in a former legislation and to explain the former legislation. I say this because the entire regime and framework of determining an account as fraud has been retained in the 2024 RBI Master directions with the added directions being explanatory and clarificatory in nature. 63. On irreparable injury I would like to quote the decision of Supreme Court in the case of Best Sellers Retail (Ind....
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....that he himself was not responsible for bringing all state of things complained of and that he was not unfair or inequitable in his dealings with the parties against whom he was seeking relief. 66. It is seen that the legal character of explanatory notes and footnotes appended to statutory instruments stands settled by the Supreme Court in the case of Tara Singh Vs. State of Rajasthan (1975) 4 SCC 86 wherein paragraph No. 20 states that notes appended to rules are promulgated contemporaneously, they form part of the legislative framework and are intended to guide application, control discretion and fill gaps where the rule is silent, without creating independent or substantive rights. It is stated in paragraph No. 22 that such notes "make explicit what is implicit" in the substantive provision and that the absence or deletion of express language in the rule does not alter the legal position where the note clarifies the underlying intent and paragraph No. 25 further reiterates that notes appended to rules operate as aids to interpretation not as sources of fresh power and merely restate or clarify the scope of authority already conferred by the parent provision. 67. It is seen....
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....r but it is equally true and an admitted position by all parties before me that the validity of the Report on the basis of qualification of the author of the report is not challenged by Plaintiff in any proceedings after he received the Report and this is the first instance of maintaining the challenge. Banks are required to follow and adhere strictly to the "Rule of Law" and principles of due process of law in all operations, including Audits. This obligation stems from the comprehensive legal and regulatory framework governing the Banking Sector. Banks have to operate for all purposes within a clear, established legal framework, and not by arbitrary power. Banks cannot appoint an ineligible and unqualified Auditor, whether Internal or External for Audit contrary to provisions of eligibility prescribed under the provisions of Section 141(1) and 141(2) of the Companies Act, 2013 if the Auditor is not a practicing Chartered Accountant registered with the ICAI. 74. In this regard attention is invited to following Master Directions / letters issued by RBI and the Government of India, Ministry of Finance to Banks which are all in the public domain and which are relevant to the issue....
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.... further states that It may, however, be ensured that if any Partner of a Chartered Accountant Firm is a Director on the Board of a Bank, no Partner of the same firm should be appointed as Concurrent Auditor in the same Bank. It is stated under Clause C - "Accountability" that if External firms are appointed and any serious acts of omission or commission are noticed in their working, their appointments may be cancelled after giving them reasonable opportunity to be heard and the fact shall be reported to ACB / LMC of the Bank, RBI and ICAI. 75. Therefore in view of the above it is preposterous to accept the argument of Banks that an External Auditor not having Chartered Accountant qualifications could be validly appointed under the 2016 RBI Master Directions for External Audit. 76. The consequences of allowing the Banks to proceed further and declaring the Plaintiff and Directors of the three Companies as fraud are already discussed hereinabove. They are virtually drastic and lead to disastrous consequences like being black listed, barred from new Bank loans / credit for years, criminal FIR filing, reputation damage, impacting fundamental rights to financial access and civil ....
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....nance with the RBI Master Directions and for the aforementioned reasons, interim relief is granted to Plaintiff in terms of prayer clause (i) in Suit (L) No. 35923 of 2025 and Suit (L) No. 37573 of 2025 and in terms of prayer clause (j) in Suit (L) No. 37862 of 2025 which read thus:- (i) In Suit (L) No. 35923 of 2025:- "i. That pending the hearing and final disposal of this Suit, this Hon'ble Court be pleased to (i) stay all actions already taken by Defendants under or in reliance upon the Report dated 15 October 2020 (Exhibit "A" hereto) or the Show Cause Notice dated 2 December 2024 (Exhibit "B" hereto); and (ii) restrain the Defendants from taking any further action or proceedings under or in reliance upon the said Report dated 15 October 2020 or the said Show Cause Notice dated 2 December 2024." (ii) In Suit (L) No. 37573 of 2025:- "i. That pending the hearing and final disposal of this Suit, this Hon'ble Court be pleased to (i) stay all actions already taken by Defendants under or in reliance upon the Report dated 15 October 2020 (Exhibit "A" hereto) or the Show Cause Notice dated 31 May 2024 (Exhibit "B" hereto); ....