AMIT DINESHCHANDRA PATEL Vs. RESERVE BANK OF INDIA

JUDGEMENT

(1.) The petitioners are aggrieved by the decision of the respondent banks taken in the Joint Lenders Meeting dtd. 29/9/2020 declaring the account of M/s Syntex Industries Limited (hereinafter referred to as "the Company") as fraud.

(2.) Facts, in brief, are that, the petitioners are the promoters, suspended directors and share holders of the company. Company vide order dtd. 6/4/2021 is currently in the Corporate Insolvency Resolution Process (CIRP) under the provisions of Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the Code of 2016"). It is around 4/7/2020, the company came to know about the South Indian Bank i.e. a member of the consortium banks i.e. respondent nos.3 to 19 having taken steps to notify fraud in relation to the loan account of the company.

(3.) Mr. Mihir J. Thakore, learned senior counsel with Ms Rhea J. Sevak, learned advocate for the petitioners submitted that in the consortium meeting held on 18/8/2020, the petitioner no.1 being the promoter and director was present, followed by the meeting dtd. 29/9/2020. It is submitted that the draft forensic audit report and supplementary forensic audit report were discussed with the member banks and they were of the view that the account of the company, shall be declared as a fraud on the basis of finding and opinion of the forensic auditor. It is submitted that all the member banks agreed in principle to declare the account of the company as a fraud and the main reason behind declaring the account of the company as a fraud was based on the forensic audit report dtd. 11/8/2020 and supplementary forensic audit report dtd. 18/9/2020 namely, (i) Breach of trust, sudden disappearance of stock etc.; (ii) Misfeasance; (iii) Embezzlement; (iv) Misappropriation of funds / Diversion of funds outside the borrowing units etc. and (v) Siphoning off funds through fake telegraphic/mail transfers. It is submitted that the Punjab National Bank i.e. respondent no.2 has addressed a communication dtd. 30/9/2020 to the stock exchange, inter alia, pointing out that fraud of Rs.1203.26 crores is being reported by the bank to the Reserve Bank of India in the accounts of the company which, was according to the bank, was disclosure under Regulation 30 of the Securities Exchange Board of India (LODR) Regulations, 2015.