Andhra Pradesh High Court - Amravati
Mr. Sudalagunta Jayaram Chowdary, vs Reserve Bank Of India on 3 October, 2024
SS
iN THE HIGH COURT OF ANOMRA PRADESH: AT AMARAVAE
(Special Original Jurisdiction}
THURSDAY, THE THIRD Day OF OCTOBER
TWO THOUSAND AND TWENTY POUR
'PRESENT: =
THE HONOURABLE spi JUSTICE VENKATESWARLU NIMMAGADDA
iA No. 1 OF 2024
IN
WP NO: 22369 OF 3004
'Between:
Mr. Suoalagunta J Jayaram Chowdary, Sfo Mr. S. Psnehais 3 Naidu, Aged about
?3 years, Oce Busi mess, Rio HNO.20G, Door No. TE3-21NG 1, Kakativa
Nagar, Tirupathi-s77 F301, Trrupathi Distriet, AP
.. Petitioner
(Petitioner in WP 22389 OF 2n04
on the fle of High Court
AND
1. Reserve Bank of Indi la, Having Office at 6, Sansad Marg, New Delhi -
110 O01, India. Rep by its Authorized Sig ney
2. State Bank of India, SME Branch Tirupad (4 292), New Balaji Calony,
Tirupati, Tirupat District, Andhra Pradesh-S47 #501, Rep by its Manager
Os
- OBS Bank of india Lic, (Lakshmi Villas Bank got merged with Union
Bank of India} D.No. 19-8-85/4b, Near Annamayya Circle, RC Rosd,
Tirupathi - 577504. Rep by fis Branch Manager
4. Union Bank of india, (Andhra Bank got merged with Union Rank of
india) Stressed Assets Management Vertical, Park Lane, MG Road,
Secunderabad, Telangana - 860 603. Rep by fis Branch Manager,
St
. indian Bank, KT Road. Near TFD Admn Building, Nehru Nagar, Tirupati
~ 517501 Rep by fis Branch Manager
~ ire
. Ms. Sudalagunta Sugars Limited, (in Corporate insalvency Resolution
Process} Having is office at Mayura Nagar Katur Post, 8. N. Kancrigs
Mandal, Tirupathi District, AP - 817644, Represented by its Resolution
Professional
Central Bureau of investigation, ACR, Visakhapatnam Office of Sundl.
ac
Of Police, D, No1-89-21/4, MAP Colony, Sector-8, Visakhapatnarn-
S80017 Rep by SUPOT of Patice
. .Respandentia}
(Respondents indo-}
~. Gounsel for the Petitioner 'SRLA JEEVAN KUMAR
Counsel for the Respondent No.7: SRLP.S.P SURESH KUMAR,
eS) ANDING COUNSEL
Pa mys
"Petition under Section 181 CF { is fled graying that In the
gircumstances stated in the affidavit Hed in support of the writ petition, the
High Court may be pleased fo direct the Respondents not te take any coercive
action/steaps of whaisoever mature against the Petitioner (Mr. Sudalagunia
Jayaram Chawdary), pending disposal of this Writ Petifion No, 22369 of 2034.
on the fle of the High Court.
~The court while directing fasue of notice is the Respondents herein to
show Cause ag fo why this apolication should not be complied with, made the
following order.(The receipt of {his order wil be deemed to be the racel ip of
notice ir the case).
ORDER:
"Heard learned counsel for the petitioner and feared Special
Fublic Frosecufar for CRI,
x
ys
Learned senior counsel appearing for the petitioner submits that
the réspondents have declared the bank account of the petiiioner as
fraudulent account without observing principles of natural justice and
without furnishing any forensic audit rapart. He further placed his.
reliance on the judgment rendered by the Hon'ble Apex Court in State
Sank of india and others v. Rajesh Agarwal and others', the relevant
portion of the said order is extracted hereunder:
"iy. Such a debarment under Clause 8.12.1 of the
Master Olrections on Frauds is akin te blacklisting the
borrowers for being untrustworthy and umwearthy of credit by
banks. This Court has consistently held that an opportunity of
searing ought fo be provided before a person is blacklisted;
we The application of audi alferam partem cannat be
implisdiy exeluded under the Master [Nrections on Frauds. in
view of the time frame contemplated under the Master
Directions on Frauds as well as the nature of the procedure
adopted, 4 is reasanably practicable far the lender Banks &
provide an opportunity of a fearing to the borrowers before
siasaifving their account as fraud:
vi The principies of natural justice demand that the
borrawers must be served a notice, given an opportunity to
explain fhe conclusions of the forensic audif report, and &e
allowed to represent by the banks! JLF before their account is
classified as fraud under the Master Directions on Frauds. in
addition, the decision classifying the borrower's account as
fraudulent must be made by a reasoned order; and vil, Since the
Master Directions on Frauds doa net expressly provide an
oppertunity af hearing to the berrawers before classifying Wier
account as fraud, auc alferam parfem has to be read into the
provisions of the directions io save them from the vice of
arbitrariness."
He further submits that as per the ratio laid down by the Hon'ble
Apex Court as stated supra, the respondents are under obligation to
samply with two condiiens Le., observation of principles of natura!
justice and providing opportunity of hearing by way of calling
explanation, by furnishing forensic audit report which are the basic
Tropa} escent
SS
mS
requirements to be complied with before declaration of any account as
fraud account, .
He further submits that in similar circumstances, this Court
Passed interim order datad 13.08.2024 in WP No. 17724 of 2024, which is
extracted hereunder:
"ft view of She reason Staied above, ere shall be
af inferim direction, cin recting ie respandents not
fo fake any coercive steps agains the petitioner,
Pursuant fo the irNoZfQ WAGTIMEM® dated
14.05.2024 till the next date of hearing."
in view of the reasan stated above, there shall be an interim
directian, directing the respondents not fo take any coercive steps
against the petitioner, UH the next date of hearing."
SO/-BCHITTE JOSEPH |
ASSISTANT R GISTRAR
PRUE COPY! SECT JON OFFICER
Fe
To,
1. The Authorized Signatory, Reserve Rank of in dla, Having Cfice at 5,
Sansad Marg, New Delhi. 440 O04, india,
The Manager, State Bank of india, SME Branch Tirupati S283),
iG
New Balaji Calony, Tirupati, Hrupall District, Andhra Pradesh.
SIPS,
3. The Branch Meneger DBS Sank of india Lid, (Lakshmi Villas Bank
gol merged with Union Bank of india) D.No.° 18-8-85/4b, Near
Annamayya Circle, RC Road, Tirupath! - 517501.
4. The Branch Manager, Union Bank of india, (Andhra Bank got
rnerged with Union Bank of India) Stressed Assets Management
Vertical, Park Lane, MG Road, Secunderabad, Telangana - 500
$03.
| The Branch Manager, indian Bank, KT Road, Near TTD Admn
Building, Nehru Nagar, Tirupati ~ 577904. .
The Resolution Professional, M/s. Sudalagunta Sugars Limiled, ( in
Corporate Insolvency Resolution Process) Having ifs office al |
Mayura Nagar Katur Post, 8. N. Sandriga Mandal, Tirupathi ENstrict,
AP ~ S1TG44, |
The Superintendent of Police Central Bureau of Investigation, ACB,
Visakhanainam Office of Superintendent of Police, D. No 1-88-217/4,
MVP. Colony, Sector-8, VisakhapatnanrS30017 (1 to 7 By RPAD)
8 One CC to SRLN_JEEVAN RUMAR Advocate [OPUC]
ra
10.
9. One CC fo SRLP.S.P. SURESH KUMAR, STANDING COUNSEL
One spare capy
HIGH COURT
NY,
DATED O/2024
NOTE: LIST THE MATTER ON 24.20.2024 ALONG WITH W.PLNo TY ad OF
ORDER
LANo.) OF 2094
IN
INTERIM DIRECTION
Sa
¥
Shanna
SSRN GR
