The Allahabad High Court allowed the petition and directed the respondents to reconsider their decision of declaring the Petitioners as wilful defaulters. A division bench of this Court comprising Hon’ble Justice Manoj Kumar Gupta and Vikram D. Chauhan relied on the apex Court decision and observed that if a settlement arrived between the parties, the decision of the respondent Bank declaring the petitioners as "wilful defaulters" is liable to be reviewed.
Brief Facts:
In this case, Petitioner no. 1 is a private limited company and petitioner nos. 2 to 5 are its Directors/Ex-Directors. They filed the present writ being aggrieved by the order dated 29.7.2021, passed by the Committee of Executives on Wilful Defaulters and order dated 18.10.2021 passed by the Review Committee of the Bank of Baroda, declaring petitioner nos. 1 to 4 as "wilful defaulters", in terms of the RBI Master Circular dated 1.7.2015.
Contentions of the Petitioner:
The learned Counsel for the Petitioners submitted that after the petitioners were declared as "wilful defaulters", they submitted a compromise proposal before the Bank, which they accepted on 14.6.2022. According to the terms of the compromise, the Bank had agreed to accept a sum of Rs. 5.75 crores from the petitioner and its sister concerns in full and final settlement of Bank dues of Rs. 7.13 crores.
The contention of the learned Counsel for the Petitioners was that in view of the settlement arrived at between the parties, the decision of the respondent Bank declaring the Petitioners as "wilful defaulters" is liable to be reviewed. In support of the said contention, the reliance was placed on the order of the Supreme Court dated 19.9.2022 in Special Leave to Appeal (C) No. 15751 of 2022.
Observations of the Court:
It was observed by this Court that in Orbitz Irrigation Pvt. Ltd. and Others Special Leave to Appeal (C) No. 15751 of 2022, which was also declared as "wilful defaulter", the Supreme Court had permitted the said Company to approach the Bank with request to review its decision declaring the said petitioner as a "wilful defaulter". This was held in view of the subsequent development, namely, the settlement arrived at between the Company and the respondent Bank. Also, the Court did not receive any objection to dispose of instant petition in the same terms.
The instant petition was disposed of by directing the Bank/competent authority to decide the representation that the petitioner's authority may file within a period of four weeks from the date of its submission. The Court also granted the liberty to avail legal remedy if in case the decision of the Bank goes against the Petitioners.
The decision of the Court:
The Allahabad High Court allowed the petition and directed the Bank to reconsider its decision of declaring the Petitioners as wilful defaulters.
Case Title: Konarkagro Polytech Pvt. Ltd. And 4 Others vs Bank Of Baroda And 2 Others
Coram: Hon’ble Justice Manoj Kumar Gupta and Vikram D. Chauhan
Case no.: WRIT - C No. - 35965 of 2022
Advocate for the Petitioner: - Ashok Kumar Pandey, Pallavi Mishra
Advocate for the Respondents: Anadi Krishna Narayana
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