1. The petitioners have filed the present petition being aggrieved by order dated 18.6.2018 and 10.10.2018 by the respondents No. 2 and 3, respectively by which they have been declared as ‘wilful defaulter’ under the provisions of Reserve Bank of India, Master Circular No.DBR No. CID.BC.22/20.16.003/2015-16 dated 1.07.2015 (hereinafter referred as ‘Master Circular’).

2. Facts of the case are as under :

The petitioner No. 1 is a company incorporated under the provisions of the Companies Act,1956 and the petitioner No. 2 is a Director of petitioner No. 1. The respondent No.1/bank is a Government owned public sector bank engaged in the business of banking in India through branches established in different States of India.

3. The petitioner No. 1 decided to set up 3.0 MTPA integrated cement plant in Tehsil Raghuraj Nagar, District Satna along with a 45 megawatt captive thermal power plant. The petitioner No.1 also got limestone mining lease of an area 906 hectare for the period of 30 years from the State of M.P. The petitioner No.1 has also obtained all the approvals from the competent authorities for setting up the plant and placed the orders for supply of key equipment for the establishment of the plant.

4. In the course of its business, the respondent No.1/bank sanctioned term loan facility in the month of April 2008, to petitioner No.1 which was revalidated in the month of October 2009. According to the petitioners, the respondents gave option of either availing the facility of Letter of Credit or disbursement Term Loan. The petitioners opted for credit facility i.e., Foreign Letter of Credit, which is an arrangement whereby the bank acting at the request of customer (importer/ buyer) undertake to pay in the goods/services to a third party (exporter / beneficiary) by a given date. According to the petitioners upon availing the Foreign Letter of Credit, funds were never disbursed to them and the same was directly paid to the exporter / beneficiary.

5. Vide letter dated 20.12.2010, the respondent No. 1/bank/bank has sanctioned the term loan of Rs. 150 Crore to the petitioners subject to the certain conditions. According to the petitioners, the respondent No. 1/bank/Bank has wrongly imposed the condition of mortgaging of mining lease, which was not there in the original sanction letter as well as in first revalidation in the month of October 2009. In fact the petitioners have no authority to mortgage the mining lease granted by the State Government hence due to which they, could not avail the facility of term loan from the respondent No. 1/bank. The respondent No. 1/bank/Bank was also not ready to amend the pre-disbursement condition pertaining to mortgage of the mining land. Ultimately, the petitioner No. 1 could not setup the cement plant due to some other compelling reasons. The petitioner No. 1 was classified as NPA on 29.8.2013. On 30.9.2016, the respondent No. 1/bank filed the original application under section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, before Dedt Recovary Tribunal, Jabalpur, for recovery of the amount paid on behalf of the buyer to the foreign supplier by way of Foreign Letter of Credit on behalf of the petitioner No. 1. The petitioners have filed the reply and also filed a counter claim against the respondent No. 1/bank.

6. After four years now the respondent No. 1/bank issued a show cause notice(SCN) to the petitioners proposing to declare them as ‘‘wilful defaulter’’ under Master Circular. By way of show cause notice, the petitioners were called upon to show cause and make a representation within 30 days of the receipt of the notice as to why they should not be included in the list of ‘wilful defaulter’. Vide reply dated 29.7.2017, the petitioners have requested for supply of all the details and documents relied upon by the respondent No.1/bank and which formed the basis of allegations / charges containing in the said show cause notice. Vide letter dated 29.11.20