AXIS BANK LIMITED Vs. GAURAV DALMIA

JUDGEMENT

(1.) The appeal arises out of an order passed on two petitions under Article 226 of the Constitution. The common judgment and order was passed on March 18, 2020. The bank which extended credit facilities to a unit that was found to be a wilful defaulter is the common appellant. Two cross-objections have been filed by the writ petitioners.

(2.) The matter pertains to the Reserve Bank s Master Circular on wilful default. The latest edition of such Master Circular was published on July 1, 2015. The facts are not much in dispute.

(3.) The writ petitioners were promoters of a company by the name of Pro Minerals Pvt. Ltd. (hereafter referred to as ' the said company' ) and the writ petitioners were, in fact, in control of such entity. Appellant Axis Bank granted credit facilities to the said company in 2012 and later discovered that the funds made available to the said company had been diverted by its promoters for purposes other than for which the credit facilities had been accorded. In due course, show-cause notices followed and proceedings were held in terms of the Master Circular of 2015 for the adjudication as to whether the relevant lending unit and its promoters were wilful defaulters within the meaning of the expression used in the relevant Master Circular.