Point of Law : Respondent- Bank has not complied with the principles of natural justice cannot be looked into at this stage more particularly, when the respondent-bank after considering the three audit reports have filed the complaint and therefore it is for the investigating agency to come to the conclusion that whether further action is required to be taken in the matter or not.

ORDER :

Heard learned Senior Advocate Mr.Prakash Jani assisted by learned advocate Mr.Shivang Jani for the petitioners. Learned Senior Advocate Mr.Prakash Jani has tendered a draft amendment. The same is allowed in terms of the draft. To be carried out forthwith.

1. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for following reliefs :

“(a) YOUR LORDSHIPS may be pleased to call for the Forensic Audit Report dated 08.05.2017, Minutes of JLM meeting dated 21.01.2020 and other records and proceedings based on which account of M/s Vimal Oil and Foods Limited is declared as fraud and after going through the same, to quash and set aside the action of Respondent Bank of declaring the action of M/s Vimal Oil and Foods;

(b) YOUR LORDSHIPS may be pleased quash and set aside all the consequential actions taken by Respondent Bank against the Petitioner pursuant to classification of account of M/s Vimal Oil and Foods Limited as Fraud;

(c) Pending hearing and final disposal of the petition, YOUR LORDSHIPS may be pleased to stay implementation and operation of action of Respondent Bank of declaring account of M/s Vimal Oil and Foods Limited and all the consequential proceedings thereto;

(d) any other and further relief deemed just and proper be granted in the interest of justice;

(e) to provide for the cost of this petition.”

2.1. Brief facts of the case are that the petitioners are the Directors of one M/s. Vimal Oil and Food Limited (herein after referred to as “Company”), a company incorporated under the provisions of the Companies Act, 1956 in the year 1992.

2.2. It is the case of the petitioners that the company availed financial assistance from the consortium of Banks including the respondent-Bank of India which was a lead bank for the business of the Company.

2.3. It is the case of the petitioners that the statutory auditor of the respondent-Bank while conducting audit for the financial year 2014-15 submitted a report dated 18.06.2015 wherein certain irregularities were alleged in the accounts of the Company and it was pointed out that there were circuitous transactions in the bank accounts of the Company raising suspicion about its genuineness. It was also alleged that accommodative letter of credits were issued by the Company in the name of some parties which were discounted and returned to the Company.

2.4. It is the case of the petitioners that without affording any opportunity of hearing, respondent-Bank conducted special audit in the borrowing account of Comapany through M/s.R.R.Tiberwal & Company Chartered Accountants, Ahmedabad and the audit report was submitted on 10.08.2015.

2.5. It appears that on the basis of such special audit report the respondent-Bank of India declared accounts of the Company as Non-Performing Asset (for short ‘NPA’) on 30th September, 2015 and thereafter, several clarifications were sought from the Company by letter dated 19.10.2015.

2.6. It is the case of the petitioners that in the 5th Joint Lenders Meeting held on 13.01.2016, it was unanimously decided that operation of the Company cannot be classified fraud based on the observations made in Special Audit Report unless a forensic audit is conducted and accordingly, one M/s Satya Prakash Mangal & Co. Chartered Accountants, New Delhi was appointed as forensic auditor on 27.10.2016 to carry out the forensic audit of the Company between the period from 01.04.2015 to 31.03.2016. The said auditor submitted the report on 08.05.2017 making observation with regard to the Company for routing of huge transaction through other banks, high value credits and debits on the same day, major portion of purchases and sale through same parties/ sister concerns/ related parties. It was also pointed out that the Company maintained and operated around six bank accounts outside the consortium member banks and Company transacted sales with such parties which are not in activities of trading of edible oil and manufacturing.

2.7. It appears that