IMPORTANT POINT
The main legal point established in the judgment is the requirement for quasi-judicial authorities to act fairly, provide an opportunity of personal hearing, and pass reasoned orders in accordance with the principles of natural justice.

JUDGMENT :

HEMANT M. PRACHCHHAK, J.

1. Today, Mr. Saurabh Soparkar, learned Senior Counsel assisted by Mr. Ravi Pahwa, learned Counsel for the petitioners has tendered the draft amendment. The said draft amendment is not objected by Mr. Bhagat, learned Counsel for the respondent. With broad consensus, the draft amendment is allowed. Amendment to be carried out within period of one week from the date of receipt of copy of the order.

2. Present petition is filed by the petitioners under Article 226 of the Constitution of India with the following reliefs:

“(A) YOUR LORDSHIPS may be pleased to issue a writ of mandamus, or any other appropriate writ order or direction, quashing and setting aside the decision of Review Committee for Identification of Willful Defaulter taken in Minutes of Meeting dated 12.2.2024 as well as decision of Willful Defaulter Identification Committee of the respondent bank taken in purported Minutes of Meeting dated 5.10.2023 and the subsequent action of respondent bank in reporting of the name of petitioners to Reserve Bank of India/CIBIL as a willful defaulter, as being illegal, unreasonable, unjustified, arbitrary as also violative of Art. 14 and 19(1)(g) of the Constitution of India.

(AA) YOUR LORDSHIPS may be pleased to issue a writ of mandamus or any other appropriate writ, order or direction quashing and setting aside the impugned notice dated 9.4.2024 issued by respondent bank as being illegal and bad in law.

(B) YOUR LORDSHIPS may be pleased to stay the implementation, operation and execution of impugned decision of Review Committee for Identification of Willful Defaulter taken in Minutes of Meeting dated 12.2.2024 as well as decision of Willful Defaulter Identification Committee of the respondent bank taken in purported Minutes of Meeting dated 5.10.2023 and the subsequent action of respondent bank in reporting of the name of petitioners to Reserve Bank of India/CIBIL as a willful defaulter pending the admission, hearing and final disposal of this petition.

(BB) YOUR LORDSHIPS may be pleased to restrain the respondent bank from taking any action in pursuance to the impugned notice dated 9.4.2024 pending the hearing and final disposal of this petition.

(C) YOUR LORDSHIPS be pleased to grant such other and further reliefs as may be deemed fit by this Hon’ble Court in the interest of justice.”

3. Brief facts of the present case are in nutshell as under:

3.1 It is the case of the petitioners that they are the erstwhile Directors of the Corporate Debtor. The respondent bank addressed a letter dated 11.2.2022 to the Corporate Debtor inter alia advising the Corporate Debtor to pay the entire outstanding of Rs. 133.60 Crores with unpaid interest immediately. The Corporate Debtor informed the respondent bank that no transactions have been undertaken by the Corporate Debtor which would attract the ingredients for examining the accounts of the Corporate Debtor as Willful defaulter account. The respondent bank addressed letter requiring the Corporate Debtor to pay the entire outstanding of Rs. 133.60 Crores. The Corporate Debtor explained that the Company was using non-fund based working capital facilities by issuing letter of credit from the respondent bank for sourcing raw materials from various suppliers. It was further explained that in the year 2018, the Corporate Debtor faced severe cash crunch and the financial position of the Corporate Debtor was worsened. It was further stated that the account of Corporate Debtor was declared as Non- Performing Asset (NPA) on 14.10.2018. It was further stated that Bank of Baroda being the lead bank of consortium of lenders directed the Corporate Debtor to route all banking transactions through Bank of Baroda. In the consortium meeting held on 17.10.2018, the respondent bank also agreed that all transactions undertaken by the Corporate Debtor should be routed through Bank of Baroda only. It was further stated that the Bank of Baroda did not allow the Corporate Debtor to make pa