SUDARSHAN OVERSEAS LTD Vs. RESERVE BANK OF INDIA

JUDGEMENT

(1.) THE petitioner M/s. Sudarshan Over Seas Limited has filed the present writ petition for following reliefs:-

(2.) STANDARD Chartered Bank is respondent No.2 to the present writ petition and had reported to the Reserve Bank of India respondent no. 1 that in the quarter ending on 30th June, 2007, the petitioner had been declared a willful defaulter. A similar letter was also addressed to Credit Information Bureau (India) Ltd. (CIBIL for short). It is, however, now admitted that the said letter stands withdrawn by respondent No.2 without prejudice to their rights and contentions to address in future a similar letter to CIBIL. Counsel for the petitioner submits that as the letter written by respondent No.2 Standard Chartered Bank is withdrawn, the writ petition to this extent is rendered infructuous. He however submits that in case respondent No.2 on any occasion in future categorizes the petitioner as a willful defaulter, they will be entitled to challenge and question the same. The writ petition in respect of prayers B and C is rendered infructuous and the prayers are not required to be examined in the present case. It is clarified that the legal contentions raised by the parties in respect of prayers B and C are left open.

(3.) THE Master Circular dated 2nd July, 2007 is in respect of willful defaulters and issues instructions in matters relating to willful defaulters. The said circular was prepared to ensure that all existing instructions on the subject are incorporated and consolidated in a single document and available at the website maintained by the Reserved Bank of India. The Master Circular also spells out the purpose of having a category of willful defaulters. It is stated that in 1999 a scheme was introduced by the Reserve Bank of India under which all banks and notified all India financial institutions were required to give details of willful defaulters of outstanding of Rs. 25 lacs or above. This was pursuant to instructions issued by Central Vigilance Commission. The Circular seeks to prescribe norms for declaring a borrower a willful defaulter, measures required to be taken against a willful defaulter and roles and responsibilities of an audit and inspecting team that deals with such accounts.