Judgment :

Krishna Rao, J.

1. The petitioners have filed the present writ application challenging the show cause notices dated 28th February, 2025. Hearing of the matter was concluded on 14th January, 2026 and this Court reserved the matter for judgment along with all connected matters. On 15th January, 2026, the respondent bank again issued communications declaring the account of the petitioners as “fraud”.

2. On receipt of the said impugned letters dated 15th January, 2026, the petitioners have filed an application being CAN No. 1 of 2026 and brought to the notice of this Court about the impugned letters dated 15th January, 2026.

3. The petitioners contended that the respondent failed to act in accordance with its statutory obligations and responsibilities in terms of the Reserve Bank of India Master Directions.

4. It is further contended that the show cause notices issued by the respondent are without any jurisdiction and is arbitrary, perverse and violation of principles of natural justice. It is submitted that the respondent bank failed to furnish either the purported Forensic Audit Report or the documents relied in the show cause notices.

5. It is submitted that the petitioners do not have access to the record of the SREI Entities since October, 2021 and the petitioners are not in a position to deal with and respond to the allegations made in the show cause notices.

6. Mr. Ratnanko Banerjee along with Mr. Jishnu Chowdhury, Learned Senior Advocates representing the petitioners, submit that the show cause notices have been issued on the basis of the Forensic Audit Report by mechanically and selectively reproducing certain parts thereof without context or basis but the respondent failed to provide a copy of the Forensic Audit Report or the copies of the documents on the basis of which the Forensic Audit Reports were prepared.

7. Mr. Banerjee submits that in the absence of each and every documents on the basis of which the allegations have been made against the petitioners in the show cause notices are being made available to the petitioners and a reasonable time is given to the petitioners, the petitioners will not be in a position to give appropriate reply to the show cause notices.

8. Mr. Banerjee in support of his submissions, has relied upon the judgement in the case of Hemant Kanoria Vs. Bank of India passed in WPA No. 28329 of 2023 dated 2nd February, 2024 and submits that in the said case, the Coordinate Bench of this Court held that a show cause notice is to be issued, enumerating the exact offences alleged against the borrower/ Director. If any, Forensic Audit Report or other document forms on the basis of the show case notice, the same is to be served along with the show cause notice.

9. Mr. Banerjee further relied upon the judgment in the case of Milind Patel Vs. Union Bank of India and Others reported in 2024 SCC OnLine Bom 745 and submits that the Division Bench of the Bombay High Court held that it is now well settled that due compliance with principles of natural justice must essentially entail compliance with obligation to provide access to the material on which the allegations are based.

10. Mr. Banerjee submits that the petitioners have challenged the show cause notices issued by the respondent on 28th February, 2025, on the ground that the respondent has issued the show cause notices without providing the document on the basis of which the impugned show cause notices/letters were issued. He further submits that after hearing, this Court has reserved the matter for judgment on 14th January, 2026 but in the meantime the respondent has issued letters dated 15th January, 2026, declaring the account of the petitioners as “fraud”.

11. Mr. Dhruv Dewan, Learned Advocate representing the respondent submits that show cause notices were issued on 28th February, 2025,the petitioners ought to have filed reply to the show cause notice but instead of filing show cause reply, the petitioners have filed the present writ application.

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