ORDER

The petitioner is before this Court seeking a direction by issuance of a writ in the nature of mandamus to defreez the accounts that have been debit frozen by the act of the respondent-Union Bank of India.

2. Heard Sri Mohammed Tahir, learned counsel appearing for the petitioner and Sri K.B.Monesh Kumar, learned counsel appearing for the respondents.

3. Brief facts, that leads the petitioner to this Court in the subject petition, as borne out from the pleadings, are as are as follows:

The petitioner availed a loan from Union Bank of India on

17.02.2018 for an amount of Rs.15 lakhs. When the loan became sticky, the respondent-Bank passed an order on 27.12.2022, freezing all the four accounts of the petitioner. The petitioner gave a representation on 01.02.2023 requesting defreezing of the accounts, to which it was replied by the respondent-Bank contending that the accounts of the petitioner have been declared to be a fraud. Aggrieved by the said action of freezement of accounts, the petitioner is before this Court in the subject petition.

4. Sri Mohammed Tahir, learned counsel appearing for the petitioner would submit that the petitioner’s accounts were never declared to be a fraud and they have been paying equal monthly installments regularly. Declaration of the accounts to be a fraud is not preceded by any notice issued to the petitioner and therefore, very act of declaration of petitioner’s accounts to be a fraud is illegal and seeks an order in his favour.

5. On the other hand, learned counsel for the respondent-Bank would refute the submissions to contend that the petitioner has availed the loan and has diverted the amounts to some other purpose and therefore, the accounts became sticky and action had to be taken in accordance with the RBI Circulars. The accounts were declared to be a fraud on account of such diversion of funds, by the petitioner. He would submit that the RBI circular does not contemplate issue of any notice to the petitioner before declaration of the accounts as a fraud.

6. I have given my anxious consideration to the contentions of respective learned counsel and have perused the material on record.

7. The aforesaid facts are not in dispute. The issue lies in a narrow compass. The petitioner availing finance from the respondent-Union Bank of India is not in dispute. The amount of finance taken is Rs.15 lakhs is also not in dispute. What drives the petitioner to this Court in this writ petition is the freezing of the accounts of the petitioner. The petitioner had four accounts in the Bank and all the four accounts are frozen on account of the impugned order dated 08.02.2023. The order reads as follows:

“With reference to the letter dated:04.02.2023 where in our requested for declaring your accounts as fraud. In this regard we wish to inform as under.

1. M/s. Fine Bakery Prop:Mr.Shaik Irfan Pasha had requested for loan of Rs.15.00lakh for procuring additional machine's to meet the increase the demand of your products.

2. You are submitted a quotation of Rs.22,93,745/- issued by M/s.Maruthi bake Equipments.pvt ltd to purchase of ITALIAN made machineries.

3. Based on the same your loan application was processed & an amount of Rs.15.00lakh was sanctioned to you on 16.02.2018.

4. The loan amount of Rs.15.00lakh was disbursed on 17.02.2018 to account number: 497701010036343 of M/s. MARUTHI BAKE EQUIPMENTS PRIVATE LIMITED maintained with Rajaji nagar branch Navarang circle Bangalore as per your instructions.

5. During subsequent audits & various unit inspections, this machine had not been installed at your unit.

6. Inspite of lapse of more than 4 year 10 months the machinery have not been installed.

7. Various opportunities were given to you to get the machine installed and submit the relevant proof like Tax invoice for having purchased the machine, How ever you are not submitted any of them.

8. Because of this the account has been declared as fraud.

9. Since the term loan has been declared as fraud, all your accounts have