Andhra Pradesh High Court - Amravati
Mytrah Energy India Private ... vs Reserve Bank Of India, on 7 January, 2021
Bench: R Raghunandan Rao
Lf?
[ 3206 ]
(SHOW CAUSE NOTICE BEFORE ADMISSION)
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
(Special Original Jurisdiction)
THURSDAY, THE SEVENTH DAY OF JANUARY,
TWO THOUSAND AND TWENTY ONE
: PRESENT:
THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO
WRIT PETITION NO: 935 OF 2021 |
Between:
Mytrah Energy (India) Private Limited, 8001, Q-City, S. No. 109, Nanakramguda,
Gachibowli, Hyderabad-500032, Represented by its Authorised Representative Mr. C.
Sainath Rao
...Petitioner
AND
1. Reserve Bank of India, Through its CGM and Secretary, Secretary's Department,
Reserve Bank of India, 16 Floor, Central Office Building, Shahid Bhagat Singh
Marg, Mumbai-400001
2. Standard Chartered Bank Commercial Banking, having its branch office at 6-3-
1090, TSR Towers, Raj Bhavan Road Somajiguda, Hyderabad- 500082.
Represented by its Managing Director
...Respondents
WHEREAS the Petitioner above named through its Advocate Sri Avinash Desai
presented this Petition under Article 226 of the Constitution of india praying that in the
circumstances stated in the affidavit filed therewith, the High Court may be pleased to
issue a Writ, order or directions and more particularly one in the nature of Writ of
Mandamus or. any other appropriate Writ declaring the action of the Respondent No 1
and 2 in declaring the account of the Petitioner as Red Flag Account as being patently
illegal, unconstitutionat against principles of natural justice and consequently set aside
the action of the Respondent No 1 and 2 declaring the account of the Petitioner as Red
Flag Account. ,
AND WHEREAS the High Court upon perusing the petition and affidavit filed
herein and upon hearing the arguments of Sri Saajan Poorayya, Senior Counsel
appearing for Sri Avinash Desai, Advocate for the Petitioner, directed issue of notice to
the Respondents herein to show cause as to why this WRIT PETITION should not be
admitted.
You viz:
1. The CGM and Secretary, Secretary's Department, Reserve Bank of India,
Reserve Bank of India, 16 Floor, Central Office Building, Shahid Bhagat Singh
Marg, Mumbai-400001
2. The Managing Director, Standard Chartered Bank Commercial Banking, having
its branch office at 6-3-1090, TSR Towers, Raj Bhavan Road Somajiguda,
Hyderabad- 500082.
are directed to show cause either appearing in person or through an Advocate, on or
before 24-01-2021 to which date the case stands posted as to why in the circumstances
set out in the petition and the affidavit filed therewith (copy enclosed) this WRIT
PETITION should not be admitted.
IA. NO: 1 OF 2021
Petition under Section 151 CPC praying that in the circumstances stated in the
affidavit filed in support of the writ petition, the High Court may be pleased to suspend
the action of the Respondent No 1 and Respondent No 2 in declaring the Petitioner's
account as Red Flag Account, pending disposal of WP No. 935 of 2021, on the file of the
High Court.
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The Court made the following: ORDER
"Notice before admission.
The petitioner is a generating company as defined under the Electricity Act,
2003. In the course of its operation, it had raised funds from various banks. It was
facing difficulty in servicing the loan accounts of these banks on account of
certain policy changes effected by the Government of Andhra Pradesh.
The petitioner had sought restructuring of its loans as permitted by the
various Circulars issued by the Reserve Bank of India. While the process of
restructuring was being undertaken, one of the creditor banks had sent a
message, dated 01.01.2021 to the petitioner, stating that the 2nd respondent-Bank
had classified the petitioner's account as a Red Flag Account.
The power to classify any standard or NPA account as a Red Flag Account
is given the individual banks under Clauses 8.9.4 and 8.9.5 of the Master
Direction, dated 01.07.2016 issued by the 1st respondent.
Aggrieved by the said Flagging of the account of the petitioner as a Red Flag
Account, the petitioner has approached this Court.
Sri Saajan Poorayya, learned Senior Counsel appearing for Sri Avinash
Desai, learned counsel for the petitioner submits that the said act of Red Flagging
the account of the petitioner is not maintainable under law and appears to have
been done more to pressurize the petitioner to agree to the demands of the 2nd
respondent, while restructuring the loans obtained by the petitioner from various
banks.
Sri Saajan Poorayya, learned Senior Counsel has raised various issues,
which require further hearing after notice is given to the respondents. He also
submits that no notice was given to the petitioner prior to Red Flagging the
account of the petitioner under Clauses 8.9.4 and 8.9.5 of the Master Direction
dated 01.07.2016. He submits that prior notice to the petitioner is necessary
before any such action can be taken. He relies upon a judgment of a Division
Bench of the High Court for the State of Telangana dated 10.12.2020 in
W.P.No.19102 of 2019, wherein the Division Bench had held that the principle of
audi altearm partem should be read into Clauses 8.9.4 and 8.9.5 of the Master
Direction dated 01.07.2016.
It is submitted that the petitioner is in the middle of restructuring of its
accounts and the entire process of restructuring is going to get affected in view
of Red Flagging of the Account of the petitioner by the 2nd respondent.
As the said Red Flagging of the Account of the petitioner is, prima facie,
violative of principles of natural justice, which have been read into Clauses 8.9.4
and 8.9.5 by the Hon'ble High Court for the State of Telangana, there shall be an
interim suspension of the action of the 2nd respondent in declaring the
petitioner's account as Red Flag Account, for a period of three (3) weeks.
The petitioner is permitted to take out personal notice to the respondents 1
and 2 by RPAD and file proof of service in the Registry by the next date of
hearing.
Post on 24.01.2021."
Sd/-M.Suryanadha Reddy
ASSISTANT REGISTRAR
PURE CONN SECTION OFFICER
To,
1. The CGM and Secretary, Secretary's Department, Reserve Bank of India,
Reserve Bank of India, 16 Floor, Central Office Building, Shahid Bhagat Singh
Marg, Mumbai-400001 |
2. The Managing Director, Standard Chartered Bank Commercial Banking, having
its branch office at 6-3-1090, TSR Towers, Raj Bhavan Road Somajiguda,
Hyderabad- 500082. (1 to 2 by RPAD- along with a copy of petition and
memorandum of grounds)
3. One CC to Sri Avinash Desai, Advocate [OPUC]
4. One spare copy
SP
HIGH COURT
RRRJ
DATED: 07/01/2021
POST ON 24.01.2021
NOTICE BEFORE ADMISSION
WP.No.935 of 2021
DIRECTION
44 jan nny
