JUDGMENT :

R.F. NARIMAN, J.

1. Leave granted.

2. The question that arises in the present appeals is whether, when a person is declared to be a wilful defaulter under the Circulars of the Reserve Bank of India [“RBI”], such person is entitled to be represented by a lawyer of its choice before such declaration is made.

3. The RBI Circular dated 01.07.2013 is described as a “Master Circular on Wilful Defaulters” [“Master Circular”] and is addressed to all scheduled commercial banks (excluding Regional Rural Banks (RRBs) and Local Area Banks (LABs)), and to All India Notified Financial Institutions. The purpose of the said Master Circular is stated as follows:

“Purpose:

To put in place a system to disseminate credit information pertaining to wilful defaulters for cautioning banks and financial institutions so as to ensure that further bank finance is not made available to them.”

Under this Master Circular, “wilful default” has been defined as follows:

“2.1. Definition of wilful default

The term “wilful default” has been redefined in supersession of the earlier definition as under:

A “wilful default” would be deemed to have occurred if any of the following events is noted:-

(a) The unit has defaul