NAKODA LIMITED Vs. CANARA BANK

JUDGEMENT

(1.) Heard learned advocate Mr. Jaimin Dave for the petitioner and learned advocate Mr. Shah for the respondent Bank.

(2.) By filing the present petition, the petitioner has prayed to set aside the decision reflected in letter dated 26.04.2016 of the respondent Bank about treating and declaring the petitioner as willful defaulter. It is further prayed to set aside decision of the committee of identifying and classifying of willful defaulters dated 16.11.2015.

(3.) Noticing the facts of the case, the petitioner company is a private limited company incorporated in the year 1984 and has been engaged in the textile business. It appears that the petitioner applied for Term Loan I and Term Loan II for working capital of Rs.60 crores, Rs.40 crores and Rs.328 crores from the respondent Bank which were sanctioned by the Bank by letters dated 06.08.2008, 17.03.2011 and 08.01.2014 respectively. By communication dated 04.07.2015, the respondent Bank intimated that the Committee for Identification and Classification of Willful Defaulter has treated and identified the account of the petitioner as willful defaulter. The case of the petitioner is that the classification was based on vague allegations that the petitioner invested Rs.42 crores in one M/s. Raj Rayon Industries Limited without the consent of consortium of the banks. In that view, the petitioner was treated as willful defaulter. The petitioner responded by letter dated 14.08.2015 and disputed the case of the respondent classifying the petitioner's account as of willful defaulter. The petitioner was asked by letter dated 31.10.2015 to remain present for personal hearing on 16.11.2015 before the committee. It appears that the petitioner had addressed letter dated 07.11.2015 to the respondent demanding certain materials and information based on the basis of which the committee had formed an opinion to classify the petitioner's account as willful defaulter.