The court granted the appellants liberty to file a detailed representation before the Review Committee under the RBI Master Circular and directed that the Review Committee's order shall not be given effect for a period of 15 days to enable the appellants to take appropriate recourse in accordance with law.

JUDGMENT :

LPA 202/2023

1. The present appeal has been filed by the appellants being aggrieved by the order dated 13.03.2023, passed by the learned Single Judge in W.P.(C) 12672/2022. The said writ petition was filed by the appellants seeking (i) setting aside of the letter dated 19.08.2022 issued by the respondent, whereby the appellants have been declared as Wilful Defaulters; and (ii) setting aside of the decision taken by the Identification Committee of the respondent bank on 27.07.2022 identifying the appellants as Wilful Defaulters.

2. By the aforesaid impugned order dated 13.03.2023 the learned Single Judge has dismissed the writ petition filed by the appellants and has granted liberty to the appellants to file a detailed representation within 10 days from the date of the said order before the Review Committee under the RBI Master Circular, which would be considered by the said Review Committee, and a reasoned order passed thereon. The contention of the appellants that relevant documents were not supplied to them was also left open to be considered by the Review Committee. The said order reads as under:-

“1. After hearing the learned counsel appearing on behalf of the parties, it is seen that the instant petition is against the order passed by the Wilful Defaulter Identification Committee.

2. The petitioners have not yet approached the Review Committee under RBI Master Circular.

3. As far as the argument raised by the learned counsel appearing on behalf of the petitioner to the effect that the relevant documents were not supplied to the petitioner to enable him to challenge the impugned order is concerned, the same would be for the Review Committee to consider in accordance with law.

3. Leaving all questions raised by the petitioner in the instant petition open, this court grants liberty to the petitioner to file a detailed representation within 10 days from today before the Review Committee under the RBI Master Circular

4. If such a representation is filed, the Review Committee is under an obligation to decide the same in accordance with law by a reasoned order to be communicated to the petitioner immediately thereafter.

5. Having considered the facts and circumstances in the instant case, especially, the order dated 05.09.2022 whereby the stay was granted, this court finds it necessary to direct that once the order is passed by the Review Committee, the same shall not be given effect for a period of 15 days to enable the petitioner to take appropriate recourse in accordance with law.

6. Leaving all questions open, the instant petition stands disposed of.”

3. The contention of the appellants in the present appeal is that the learned Single Judge failed to appreciate that there has been breach of principles of natural justice inasmuch as the appellants have been declared as Wilful Defaulters by the respondent without being given an opportunity to make submissions before the Identification Committee. It is submitted that the learned Single Judge has failed to appreciate that the respondent bank has failed to follow the procedure as prescribed under clause 3 of the RBI Master Circular bearing No. DBR No. CID.BC.22/20.16.003/2015-16 dated 01.07.2015,[“Master Circular”] read with judgment of the Supreme Court in State Bank of India v. Jah Developers Put. Ltd. & Ors., (2019) 6 SCC 787. It is stated that basis of such declaration against the appellants is a Forensic Audit Report/Transaction Audit Report, yet the appellants were provided only with the relevant extracts of the said report, instead of the full report and the appellants were constrained to obtain the said report from another bank of the consortium. It is contended that the learned Single Judge has failed to appreciate that the respondent bank has not provided the appellants with any document, material or evidence (except for two pages of Forensic Audit Report), which h