NARINDER CHUGH Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) The instant Writ Petition has been preferred under Articles 226/227of the Constitution of India seeking writ in the nature of Certiorari, for quashing of minutes of meeting of Fraud Identification Committee dtd. 21/6/2024 (Annexure P-13) and its communication dtd. 12/7/2024 (Annexure P-12) issued by the respondent, whereby the petitioner was declared fraud, besides seeking quashing of all consequential proceedings initiated on account of such declaration.

(2.) Briefly stating the facts of the case are that the petitioner had rich experience on issues pertaining to international trade for over last two decades. M/s Rama Krishna Knitters Private Limited was financed by consortium of four Banks and was being managed by Naresh Kumar Gupta. After his death on 13/11/2014 the said company went into financial trouble, Shalu Gupta wife of Naresh Kumar Gupta was other Director of the Company. On 27/11/2014, the then Directors of said Company introduced the credentials of the petitioner in the consortium meeting requesting him to provide requisite financial support for the revival of the Company. The Members of the Banks were satisfied, and the petitioner was called upon to provide requisite support to the Company for its survival. On 24/12/2014 the petitioner submitted the reasons of incipient sickness in the Company and the measures required for revival thereof to the consortium members vide letter (Annexure P-1). On 11/12/2014 the petitioner was made President of the Company vide (Annexure P-2) and on 1/2/2015 the petitioner became the Director of the Company with the sole aim to make attempt for revival of the Company. Earlier the petitioner was assured by the Punjab National Bank and State Bank of India to provide additional funding of Rs.60.00 crores as a part of correction action plan but later State Bank of India (in short SBI) took decision on 27/2/2015 not to restructure the debt where as Punjab National Bank (in short PNB) vide letter dtd. 30/3/2015 had issued sanction letter wherein no additional funding was proposed till the joint documentation was done by all the Banks. Owing to this fact the petitioner did not extend his personal guarantee and the Directorship of the petitioner was also not confirmed in the next Annual General Meeting held on 25/6/2015 as per Sec. 161 of the Companies Act, 2016. As a matter for clarification, the petitioner wrote letters to the Banks that his offer to provide guarantees be treated as null and void in view of the no correction action plan having been agreed to be launched for the Company vide letters dtd. 27/1/2016 (Annexure P-3) and vide letter dtd. 24/2/2016 (Annexure P-4) the petitioner requested the Banks to return the guarantee. Thereafter, the loan account as well as the petitioner was declared as fraud vide letter dtd. 12/7/2024 (Annexure P-12) without serving him proper Show Cause Notice and claiming the act of the respondent Bank to be illegal, null and void, the instant petition has been preferred.

(3.) We have heard the Learned counsel for the parties and also perused the record with their assistance.