J U D G M E N T

MINI PUSHKARNA, J: (ORAL)

CM APPL. 10380/2024 & CM APPL. 10422/2024 (For Exemptions)

1. Exemptions allowed, subject to just exceptions.

2. Applications are disposed of.

W.P.(C) 2543/2024 & CM APPL. 10379/2024

3. The present petition has been filed by the petitioners challenging the action of the respondent no. 2/IDBI Bank to declare the account of the petitioners as ‘Fraud’ purportedly in terms of Master Direction on Frauds-Classification and Reporting by Commercial Banks and select FIs bearing No. RBI/DBS/2016-17/28 DBS. CO. CMFC.BC. No. 1/23/04.001/2016-17 dated 1st July, 2016 updated as on 03rd July, 2017 issued by the respondent no.1-Reserve Bank of India (“RBI”).

4. Learned Senior Counsel appearing for the petitioners submits that the aforesaid action by the respondent no. 2-bank is patently illegal, as the same has been done without following the Principles of Natural Justice, as directed to be read in the Master Circular by the Supreme Court vide judgment in the case of State Bank of India & Ors Vs.

Rajesh Aggarwal & Ors, reported as 2023 SCC OnLine SC 342.

5. Learned Senior Counsel appearing for the petitioners has drawn the attention of this Court to the E-mail dated 8th February, 2024 written by the petitioner to the respondents, wherein they have stated that they have learnt about the decision taken to declare the accounts of the petitioner as ‘Fraud’, however, such decision taken by the bank was in violation of the aforesaid judgment, as no hearing or notice was given to the petitioner in this regard. The E-mail dated 8th February, 2024 issued by the petitioner reads as under:

“------Forward message--------

From: Sanjay Tiku Sanjay.Tiku@gmail.com Date: Thu, Feb 8, 2024 at 3:04 PM Subject: Regarding JMT Auto Limited To: , , , , To, 1. IDBI Bank Ltd, 9th Floor, Plate B, Block 2, NBCC Office Complex, East Kidwai Nagar, New Delhi-Pin Code – 110023

2. IDBI Bank Limited, Zonal Office, IDBI House, 2nd Floor, Unit-9, Janpath, Bhubaneshwar, Odisha -751022.

3. IDBI Bank Limited IDBI Tower, WTC Complex Cuffe Parade, Mumbai-400 005 E-Mail: sunit.pandey@idbi.co.in, fm.adhikari@idbi.co.in, prash ant.kachhap@idbi.co.in, gro.delhi@idbi.co.in, rahul.nawkar@idbi.co.in Dear Sir, I am one of the erstwhile directors of the company viz. M/s JMT Auto Limited in which CIRP under the IBC, 2016 had commenced w.e.f. 23.02.2022 and pursuant thereto the resolution plan was approved vide Order dated 21.08.2023 of the Hon’ble NCLT, Delhi.

I have reliably learned that your Bank has taken a decision to declare the accounts of the M/s JMT Auto Limited as fraud. We are deeply concerned at any such decision taken by your Bank as no opportunity has been provided to make our submissions before any such decision is taken by your Bank.

Kindly Note that any such decision, if has been taken by your Bank, is in complete violation of the judgment passed by the Hon’ble Supreme Court in State Bank of India vs. Rajesh Agarwal and the RBI Guidelines.

In view of the same, any such decision taken by you/your Bank should be withdrawn immediately and the same should be informed to the Undersigned.

Please be informed that in failing to withdraw any such action, the Undersigned shall be constrained to take appropriate steps and remedy in the Court of law.

Thanking you in anticipation Best Regards Sanjay Tiku.

--

Sanjay Tiku +91 9711005555 --

Sanjay Tiku +91 9711005555”

6. Issue notice. Notice is accepted by learned counsel appearing for the respondent no. 2/IDBI Bank. Learned counsel appearing for respondent no.2- IDBI Bank submits that the petitioners’ account was declared as ‘Fraud’ vide order dated 28th December, 2021 and intimation in this regard was given to the RBI on 6th January, 2022.

7. He further submits that since the aforesaid decisions were taken much prior to the decision of the Supreme Court in the case of Rajesh Aggarwal (Supra), therefore, no notice was issued to the petitioners and no hearing was granted to the petitioners in this regard.

8. Having heard le