JUDGMENT

Sanjeev Sachdeva, J. (Oral)--Petitioners impugn legality and validity of the circular dated 1st July, 2016 bearing number DBS.CO.CFMC.BC. No.1/23.04.001/2016-17 issued by the Respondent No.1-Reserve Bank of India to the extent it violates Article 14 of the Constitution of India as well as the decision/order of the Respondent-Banks declaring and categorising and reporting the accounts of the petitioner as `fraud'.

2. The Supreme Court in Civil Appeal No.7300 of 2022 titled State Bank of India & Ors. Vs. Rajesh Agarwal & Ors. vide judgment and order dated 27th March, 2023 has held that the rule of audi alteram partem ought to be read in Clauses 8.9.4 and 8.9.5 of the Master Direction on Fraud. The relevant portion of the said judgment is reproduced hereinbelow:

"79. In light of the legal position noted above, we hold that the rule of audi alteram partem ought to be read in Clauses 8.9.4 and 8.9.5 of the Master Directions on Fraud. Consistent with the principles of natural justice, the lender banks should provide an opportunity to a borrower by furnishing a copy of the audit reports and allow the borrower a reasonable opportunity to submit a representation before classifying t