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IN THE HIGH COURT AT CALCUTTA
KRISHNA RAO
Hemant Kanoria – Appellant
Versus
Punjab National Bank – Respondent
Judgment :
Krishna Rao, J.
1. The petitioners have initially challenged the show cause notices dated 16th April, 2024 wherein the bank directed the petitioners to show cause as to why the account of the petitioners shall not be declared as “fraud” and during pendency of the writ application, the respondent bank issued an order declaring the account of the petitioners as “fraud”.
2. 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.
3. 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.
4. 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.
5. Mr. Ratnanko Banerjee along with Mr. Jishnu Chowdhury, Learned Sen
A bank must adhere to principles of natural justice by providing borrowers with necessary documents and an opportunity to be heard before classifying accounts as fraud.
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