ANIL BIOPLUS LIMITED Vs. RESERVE BANK OF INDIA

JUDGEMENT

(1.) Heard learned Advocate Mr.Arjun R. Sheth appearing with learned Advocate Ms.Rhea J. Sevak for the petitioners, learned Advocate Mr.Amar Bhatt for respondent No.1 and learned Advocate Mr.K. M. Parikh for respondent No.2 in both the petitions.

(2.) Both the petitions revolve around a similar issue i.e. respondent No.2 Bank, while classifying the accounts of the present petitioners as fraudulent accounts under RBI Master Directions of Frauds - Classification and Reporting by Commercial Banks and select FIs dtd. 1/7/2016, had neither afforded an opportunity to the petitioners, nor had the documents, including the report of Forensic Auditor, been provided to the petitioners. It would appear that while there are various prayers raised in the present petitions, but the principal grievance of the petitioners, as referred to herein above, is no more res integra more particularly the law having been laid down by the Hon'ble Apex Court in case of State Bank of India Vs. Rajesh Agarwal, reported in (2023) 6 SCC 1. It would appear from the judgement of the Hon'ble Apex Court that the law laid down by the Hon'ble Apex Court inasmuch as that while classification of an account as fraud not only results in the same being reported to the Investigating Agencies, but has other penal and civil consequences against the borrowers and whereas the same includes debarring the borrowers from accessing institutional finance, which is akin to blacklisting the borrowers for being untrustworthy and unworthy of credit by banks. In this back ground, the Hon'ble Apex Court had laid down the dictum that the application of audi altra partem cannot be impliedly excluded under the Master Directions on frauds and whereas the lender banks are required to follow the principles of natural justice, more particularly by serving a notice upon the borrower and even providing a copy of the forensic audited report and after considering the objections of the borrower, a reasoned order is required to be passed.

(3.) Insofar as the present case is concerned, it is indisputable that the principles of natural justice had not been followed and whereas neither the petitioners had been given an opportunity of hearing, nor copy of the forensic audit had been given to the petitioners before the account had been declared as fraudulent account, though it is the case on behalf of the respondent Bank that as per the Master Directions issued by the RBI, such a procedure was not envisaged. Be that as it may, in view of the law laid down by the Hon'ble Apex Court, this Court is not required to delve into whether the stand of the bank is correct or not. Suffice it to state that the law laid down by the Hon'ble Apex Court is required to be followed scrupulously.