JUDGMENT :

BHARGAV D. KARIA, J.

1. Heard learned advocate Mr. Ravi Pahwa for Thakkar and Pahwa Advocates for the petitioner and learned advocate Mr. Bhaskar Sharma with learned advocate Mr. Mihir H. Pathak for respondent no. 1.

2. Rule returnable forthwith. Learned advocate Mr. Bhaskar Sharma waives service of notice of rule on behalf of respondent no. 1.

3. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the impugned action of the respondent bank identifying the account of the petitioner as Willful Defaulter and subsequent reporting of the name of the petitioner and its Directors to Reserve Bank of India/CIBIL as Willful Defaulter.

4. Brief facts of the case are as under:

4.1 The petitioner is a company registered under the provisions of the Companies Act, 1956 and is engaged in the business of manufacturing of TMT Bars, MS Round Bars, SS Flats and MS Billets.

4.2 In the year 2010, the petitioner company was acquired by Electrotherm (India) Ltd. and therefore, the petitioner is a wholly owned subsidiary of Electrotherm (India) Ltd.

4.3 The petitioner company availed financial assistance from consortium of banks having State Bank of India and Bank of Baroda as members of the said Consortium Banks. The State Bank of India was having debt of outstanding loans of about Rs. 55.00 crores assigned to one Invent Assets Securitisation and Reconstruction Pvt. Ltd. in February, 2015. The petitioner company entered into settlement with the said company for repayment of the assigned debt/loans.

4.4 The respondent bank had sanctioned term loan of Rs. 7.50 Crores, Letter of Credit facility of Rs. 5.00 Crores and Cash Credit facility of Rs. 20.00 Crores before the acquisition of the petitioner by Electrotherm (India) Ltd. in the year 2010. The Credit facilities were further reviewed by the respondent bank vide sanction letter dated 05.05.2011 and the term loan of Rs. 7.15 Crores, Letter of Credit of Rs. 6.00 Crores and Cash Credit facility of Rs. 15 Crores was sanctioned. Thereafter, the outstanding loan amount was restructured by the respondent bank vide sanction letter dated 30.11.2012. The outstanding loan was further reviewed by the respondent bank vide sanction letter dated 05.01.2015.

4.5 It is the case of the petitioner that due to operational losses, the petitioner company faced severe liquidity crunch and the petitioner company was not able to repay the loans to the respondent bank within the prescribed repayment schedule and accordingly, the account of the petitioner was identified as Non-Performing Asset (NPA) by the respondent bank on 31.07.2014.

4.6 The petitioner company received show cause notice dated 30.09.2016 from the respondent bank wherein it was informed to the petitioner company that the Committee of Executive on Willful Defaulters of the respondent bank is of the opinion that the borrower company and its Directors be classified as Willful Defaulters as per the guidelines of Reserve Bank of India.

4.7 The petitioner made a representation dated 6.10.2016 to the respondent bank pointing out various factors due to which the petitioner company could not make repayment of the outstanding loan within the prescribed time period.

4.8 It is the case of the petitioner that though the petitioner had approached the Board For Industrial and Financial Reconstruction (BIFR) under section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 the petitioner received the letter dated 5.11.2016 from the respondent bank rejecting the settlement proposal of the petitioner company.

4.9 It is the case of the petitioner that the petitioner received letter dated 16.01.2017 informing the petitioner about personal hearing given to the petitioner on 31.01.2017, however, during the said period, the promoters/directors of the company were out of the country and therefore, the petitioner addressed a letter dated 24.01.2017 to the respondent bank requesting to postpone the hearing before the Committee of