GOURI PRASAD GOENKA Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) The writ petition has been preferred against an order passed by the Review Committee (RC) of the respondent no. 1-Bank, affirming the declaration of Wilful Defaulter of the petitioner. Learned counsel for the petitioner contends that the petitioner used to have business of Tea Gardens. It is argued that in none of the Committee Orders, any cogent ground has been made out under the Master Circular of the Reserve Bank of India (RBI) for declaration of Wilful Defaulters. It is argued that the RC, without returning its independent findings, has mechanically repeated the decision of the Wilful Defaulters Identification Committee (First Committee). Thus, the RC Order is devoid of independent reasons and ought to be set aside.

(2.) Learned counsel argues that the borrower-Company, that is, Duncans Industries Limited, of which the petitioner was a Director, had approached the Bank for a One Time Settlement (OTS). The time for repayment of instalments under the OTS, which was agreed upon by the parties, had been extended from time to time. Before the last extended period expired, the borrower-Company underwent a Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016. Thus, it cannot be said that the borrower-Company was a defaulter", as it did not have the opportunity to repay the loan under the OTS due to the commencement of the CIRP.

(3.) Secondly, the borrower-Company suffered huge losses during the relevant financial years, that is, from 2014-15 to 2018-19. The Committees failed to take into consideration that due to such huge losses, it could not be said that the borrower, despite having capacity to honour the repayment obligations, had defaulted in meeting the same. It is argued that there is no allegation of siphoning off the proceeds from sales realization.