AMIT DINESHCHANDRA PATEL Vs. RESERVE BANK OF INDIA

JUDGEMENT

(1.) Heard learned Advocate Mr. Arjun Sheth with learned Advocate Ms. Rhea Sevak on behalf of the petitioners, Mr. Amar Bhatt on behalf of respondent no.1- Bank, learned Advocate Mr. Paritosh Gupta for respondent no.2, learned Advocate Mr. Bhaskar Sharma for respondent no.3 and learned Advocate for M/s Wadiagandhy and Company on behalf of respondent no.5.

(2.) By way of this petition, the petitioner has inter alia challenged classification of account of the respondent no.5-Company of which the petitioners were promoters as a fraudulent account by the respondents no. 2, 3 and 4 Banks, more particularly as per the Reserve Bank of India Master Directions on Fraud - Classification and Reporting by commercial banks and select FIs dtd. 1/7/2016. It has been contended by learned Advocate Mr. Sheth that before classifying the account as fraud, the respondents Bank have neither afforded an opportunity of hearing to the petitioners nor copy of the forensic audit report conducted, had been provided to the petitioners.

(3.) Learned Advocate would submit that while the respondent no.2 bank, in its affidavit-in-reply has clearly stated that before classifying the account as fraud, since the Master Directions did not envisage compliance with the principles of audi alteram partem, no hearing or opportunity had been assigned to the petitioners. Learned Advocate would further submit that insofar as the respondent no.3 Bank is concerned, no specific reply is given to the ground taken in the petition as regards non-grant of opportunity. As far as respondent no.4 bank is concerned, no affidavit-in- reply appears to be filed. Learned Advocate would submit that having regard to such a position, it would clearly appear that the respondent bank before classifying the accounts as fraud had not afforded an appropriate opportunity of hearing to the petitioner. Learned Advocate would further draw the attention of this Court to the observation of the Hon'ble Supreme Court at paragraph no. 95 of the said decision more particularly whereby the Hon'ble Supreme Court had reserved liberty in favour of the banks to take appropriate fresh steps in accordance with the said decision.