First

petitioner

is

a

Private

Limited

Company

incorporated

under

the

provisions

of

the

erstwhile

Companies Act, 1956. The other petitioners who are

spouses happen to be directors of the said company which

has been carrying on the business of steel and non-steel

products. They are knocking at the doors of Writ Court for

assailing the respondent-banks' letter dated 22.07.2021, at

Annexure-K whereby, they were asked to show cause "as to

why your account and you be not classified by the bank as

a willful defaulter". They also call in question Review

Committee order dated 28.7.2022 at Annexure-A whereby,

not being convinced of the cause shown, they have been

declared as willful defaulters.

Learned

Sr.

Advocate

appearing

for

the

petitioners argues for faltering the impugned show cause

notice and the order that: an opportunity of personal

hearing despite demand was not granted and thus, there is

violation

of

principles

of

natural

justice

warranting

4

invalidation of the impugned instruments; branding the

borrowers as willful defaulters cannot be readily done, there

being extant RBI guidelines and Central Government

Circulars

regulating

the

same.

The

due

procedure

prescribed under these has not been followed. In view of

pendency of IBC, the bank could not have taken up the

coercive proceedings, there being statutory moratorium.

Learned Advocate Sri.N.Murthy appearing for the

Panel Counsel of the Bank, opposes the petition by filing the

Statement of Objections: petitioners are not scrupulous

borrowers; despite grant of several opportunities, they have

chosen not to repay the debts and therefore, they and their

loan account have been declared as "defaulters"; the

impugned action has been done in accordance with RBI

guidelines

and

after

giving

opportunity

of

making

representation; thus, there is compliance with principles of

natural justice; the plea of moratorium in terms of IBC does

not avail to the petitioners. In support of his case, he banks

upon certain decisions and seeks dismissal of the Writ

Petition.

5

Having heard the learned counsel for the parties

and having perused the Petition Papers, this Court declines

indulgence in the matter for the following reasons:

(a)

The fact that petitioners happen to be borrowers

of respondent-Bank for a huge sum in several crores of

rupees, is outstanding, is not in dispute. Even the records

produced by the petitioners themselves show that they

were

given

an

opportunity

of

representation

and

accordingly, they had made a few to the bank. Petitioners

vide letter dated 6.8.2021 had sought for extension of the

period for sending the reply on the ground that the GST

departments of Karnataka and Tamil Nadu have been

investigating the affairs of the petitioner-company and they

had seized certain important documents and registers. The

bank by its reply dated 3.9.2021 had granted an additional

period of thirty days.

(b)

Petitioners had sent one more letter dated

13.9.2021 seeking further extension reiterating the same

ground and requested the bank not to take up any coercive

measures till they prepare their reply and submit after

6

obtaining copies of seized documents from the GST

departments. This the respondent-bank did not agree with,

enough opportunity having already been given and no bona

fide being shown by making some repayment. The bank

vide reply dated 19.11.2021 permitted the petitioners to

make personal submission but participation of Chartered

Accountant or Advocates was not permitted. How this has

prejudiced case of the petitioners remains unsubstantiated

despite vehement submission of learned Sr. Advocate

appearing for them. Had the petitioners been granted a

personal hearing, what they would have said could have

been

shown

to

this

court.

However,

despite

long

submission, they failed to do it here as well. The violation of

principles of natural justice cannot be chanted like mantra,

sans demonstrable prejudice.

(c)

Petitioners were given again sufficient time vide

letter dated 28