ORDER :

Prayer: Petition filed under Article 226 of the Constitution of India for issuance of a Writ of Certiorari calling for the records of the 1st Respondent contained in its impugned order bearing SAMB/CBE/CLO III/431 dated 09.08.2019 and to quash the same as arbitrary unjust and illegal.

The erstwhile managing director of a company, that has now gone into liquidation pursuant to an order passed by the National Company Law Tribunal, questions the propriety of an order dated August 09, 2019 passed by the State Bank of India branding him as a wilful defaulter within the meaning of the expression in the Master Circular issued by the Reserve Bank of India on July 01, 2015.

2. The principal ground urged by the petitioner is that there does not appear to be any consideration of the petitioner's representation and no application of mind by the Review Committee of the bank.

3. A notice was issued on May 10, 2018 by the State Bank of India to several directors of the borrower company which had obtained credit facilities in connection with its business. Though the copy notice appearing at page 184 of the papers filed by the petitioner pertains to another then director of the relevant company, there is no dispute that the contents of the individual notices issued to the several directors were the same. In essence, the relevant notice claimed that the erstwhile State Bank of Travancore, which had since merged into the State Bank of India, as a part of a consortium of banks, had granted credit facilities to company Senthil Paper and Boards Pvt. Ltd and the loan account had been classified as a non-performing asset with effect from March 31, 2017. The notice then proceeded to state as follows:

“... The Wilful Defaulter Identification Committee in the Bank, (hereinafter referred to as "Committee") has examined the conduct of the account and utilisation of credit facilities (availed from our Bank) and has concluded that the acts/events of wilful default as detailed in the Annexure have been committed by you.”

The Annexure to the notice indicated that criteria 2.1.3.a and 2.2.1.d of the Master Circular were attracted because of the events of default described therein. The notice called upon the relevant director “to show cause and make submissions in writing within 30 days from the date of receipt of this letter as to why your name should not be included in the list of wilful defaulters ...”.

4. There is no dispute that a written reply was issued to such notice by the petitioner herein, whereupon the Identification Committee of the bank proceeded to consider the same and concluded that, inter alia, the petitioner was liable to be labelled as a wilful defaulter. The reasons furnished by the Identification Committee for holding against the petitioner on the first count were that the company had not given any specific reply to the charge of insufficient credit against sales in the relevant account; that the company has not substantiated its claim for having repaid Rs.120 crore; and, that the funds generated from the sales proceeds had not been used by the company for reducing the outstanding loan. As to the second count of charge, the Identification Committee held that the company accepted that it had maintained a current account with Indian Bank and that it routed transactions through such account. As such, the Identification Committee perceived that there was a wilful default on the part of the borrower since funds had been routed through a bank other than the lender bank without its permission. The petitioner, as an executive or working director of the borrower company, was perceived to be a wilful defaulter as being responsible for the borrower company's conduct of its affairs. It appears that minutes were drawn of the meeting of the Identification Committee and such minutes were forwarded to the Review Committee. Two members of the Review Committee of the bank appeared to have signed the attendance sheet, so to say, and accepted the Identifica