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2024 Supreme(Online)(GUJ) 13025
HIGH COURT OF GUJARAT
MR. JUSTICE HEMANT M. PRACHCHHAK, J
AMIT DINESHCHANDRA PATEL – Appellant
Versus
PUNJAB NATIONAL BANK – Respondent
R/SPECIAL CIVIL APPLICATION NO. 3997 of 2024
Petitioner Advocates:ARJUN R SHETH(7589) ,Respondent Advocate: DHRUVKUMAR S CHAUHAN(8138)
The court emphasized the necessity of reasoned orders in banking decisions and the importance of fair proceedings in judicial administration.
Headnote:(A) Banking Regulation Act, 1949 - Classification of loan accounts - The respondent bank classified the petitioners' loan account as 'Fraud' without due cause or accounts existing with the bank - The court emphasized the necessity of reasoned orders and the importance of fair proceedings in judicial administration. (Paras 1, 2, 3)
(B) Interim Relief - The court issued a stay on the impugned order pending final disposal, highlighting the need for consideration of the matter before any final action is taken. (Paras 4, 5)
Facts of the case:
The petitioners contended that there was no due owed to the bank and no accounts existed, yet the bank classified their loan as fraudulent. The court noted the bank's failure to provide reasons for its decision.
Findings of Court:
The execution of the bank's order was stayed until the petition's final disposal, indicating the need for a thorough examination of the circumstances.
Issues: The main issues included the legitimacy of the bank's classification of the loan account and the absence of due process in the decision-making.
Ratio Decidendi: The court ruled that the bank's actions lacked justification and emphasized the importance of reasoned decisions in maintaining the integrity of judicial processes.
Result: The execution and implementation of the impugned order were stayed.
ORDER
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Draft amendment is allowed. Amendment to be carried out forthwith and learned Counsel for the petitioner shall supply the amended copy to the registry.
Mr. Mihir Joshi, learned Senior Counsel for the petitioners has submitted that there was no due of the concerned bank and even there was no accounts of the petitioners with the respondent bank however, impugned order came to be passed by the respondent bank.
This Court while issuing notice on 11.3.2024 had also issued notice as to interim relief and made it returnable today. However, in the meantime, the respondent bank has passed final order on 22.4.2024 without stating any reason. Relevant part of the said order reads as under:-
- "Accordingly, Bank has decided to classify your loan account as "Fraud" for the following reasons.
- I. Misappropriation and criminal breach of the trust. II. Diversion of Funds"
- Further, in the decision of this Court in Special Civil Application No.503 of 1997 the Court has observed as under:-
- "The chain of events that has taken place as disclosed in the Order under appeal leaves no room for any other conclusion then that the appellant-Defendant acted in a manner to over reach the decision of the Court in the matter subjudice before it and to infractuate whole proceedings by his own act. It is not a case where defendant has exercised his right under the Contract, before filing of the suit nor it is a case where he has exercised such right before notice of application has been served upon him. The fact that law does not favour ad-interim ex-parte order and requires that orders are made in the presence of the parties does implicitly call restraint from the parties after they are apprised of respective case and the materials, inviting attention of the Court on application for interim relief from indulging into any into proceedings getting confidence of the people Institution of Court administration of justice. as to desist such activities which results infructuous and erodes the in the basic efficacy of the an effective tool of adminstration of justice."
- In view of the above circumstances, the matter requires consideration.
- RULE. The execution and implementation of the impugned order dated 22.4.2024 passed by the respondent bank is hereby stayed till final disposal of the petition.
- Mr. Vishawas K. Shah, learned Counsel for the respondent No.5, Mr. Dhruv Chauhan, learned Counsel the respondent No.6 and Mr. Amiraj Barot, learned Counsel for the respondent No.3 have submitted that they will file affidavit-in-reply on behalf of the concerned respondents in the registry.
- Registry to accept the affidavit-in-reply filed by learned advocates on behalf of the concerned respondents and replace the same in the file.
