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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
NAGESH BHEEMAPAKA
Vidyasagar Parchuri – Appellant
Versus
IDBI Bank, Rep. by its Deputy General Manager – Respondent
ORDER :
NAGESH BHEEMAPAKA, J.
Petitioners case is that Respondent No. 1 – IDBI Bank acted illegally, arbitrarily and in violation of the RBI Master Circulars dated 01.07.2013 and 01.07.2015 by classifying them as well as Respondent No. 2 company as ‘Willful Defaulters’. It is contended that the impugned action is contrary to the principles of natural justice as laid down by the Supreme Court in State Bank of India v. Jah Developers Pvt. Ltd. (Civil Appeal No. 47761 of 2019). Petitioners state that the orders dated 08.07.2021 (communicated on 12.07.2021) of the Identification Committee and the confirming order dated 27.08.2021 (communicated on 26.10.2021) of the Review Committee are fundamentally-illegal as they fail to comply with mandatory procedural safeguards, and therefore require interference.
1.1. Petitioners state that they were formerly the management of Respondent No. 2 company which is undergoing CIRP pursuant to orders of the NCLT, Hyderabad Bench in CP(IB) No. 645/HDB/2018. The NCLT admitted the company into CIRP on 05.06.2023. Due to deficiencies in public announcement and other procedural shortcomings, the NCLT restarted the CIRP process by order dated 21.02.2025. It i
Banks classified as private corporations are not subject to writ jurisdiction under Article 12 of the Constitution; compliance with RBI directives is necessary for classifying borrowers as 'willful d....
Court found that the classification as willful defaulters complied with RBI guidelines, with no violation of procedural rights or natural justice principles, thus dismissing the writ petition.
Classification of corporate debtors as wilful defaulters requires adherence to RBI guidelines, and failure to establish procedural violations will not warrant judicial intervention.
The declaration of a wilful defaulter must adhere to principles of natural justice, requiring access to relevant documents for a meaningful defense.
The main legal point established in the judgment is the requirement for quasi-judicial authorities to act fairly, provide an opportunity of personal hearing, and pass reasoned orders in accordance wi....
The classification of individuals as wilful defaulters must be supported by sufficient evidence and adhere to procedural requirements set by RBI guidelines; mere assumptions are inadequate.
The main legal point established in the judgment is that the actions of the borrower-Company, including non-repayment, diversion of funds, and disposal of assets, constituted wilful default under the....
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