Bombay High Court
Devanshu Praveen Desai vs Allahabad Bank And 6 Others on 27 June, 2017
Bench: R.M. Savant
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2483 OF 2016
Parekh Aluminex Limited )
a company registered under the )
provisions of the Companies Act,1956 )
and having its registered office at 601, )
Auto Commerce House, Kennedy Bridge, )
Nana Chowk, Grant Road, Mumbai 400 007).. Petitioner
Vs.
1. Allahabad Bank )
having its registered office at Netaji Subhas )
Road, Kolkata 700 001 having its )
branch office at 35-41, Hotel Hirmani )
Compound, Dr. Ambedkar Road, Patel, )
Mumbai 400 012. )
2. The Willful Defaulter Identification )
Committee of Allahabad Bank, having )
its office at Netaji Subhash Road, )
Kolkata 700 001. )
3. The Deputy Manager (Recovery) )
Allahabad Bank, having his office at Netaji )
Subhash Road, Kolkata 700 001. )
4. General manager (Recovery & Law) )
Allahabad Bank having his office at Netaji )
Subhash Road, Kolkata 700 001. )
5. The Willful Defaulter Review )
Committee of Allahabad Bank having its )
office at Netaji Subhash Road, )
Kolkata 700 001. )
6. Reserve Bank of India, )
a Government of India undertaking having )
its Head Office at Shahid Bhagat Singh )
Marg, Mumbai 400 001 and also office at )
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6, Sansad Marg, New Delhi - 110 001. )
7. Credit Information Bureau (India) )
Limited, a company incorporated under the )
Companies Act, 1956 and having its )
registered office at Hoechst House, )
th
6 Floor, 193 Backbay Reclamation. )
Nariman Point, Mumbai 400 021. ).. Respondents
WITH
WRIT PETITION NO. 2485 OF 2016
Devanshu Praveen Desai )
Adult, Indian Inhabitant )
residing at 42, Dharam Prem, Nehru Road, )
Vile Parle (East), Mumbai 400 057. ).. Petitioner
Vs.
1. Allahabad Bank )
having its registered office at Netaji Subhas )
Road, Kolkata 700 001 having its )
branch office at 35-41, Hotel Hirmani )
Compound, Dr. Ambedkar Road, Patel, )
Mumbai 400 012. )
2. The Willful Defaulter Identification )
Committee of Allahabad Bank, having )
its office at Netaji Subhash Road, )
Kolkata 700 001. )
3. The Deputy Manager (Recovery) )
Allahabad Bank, having his office at Netaji )
Subhash Road, Kolkata 700 001. )
4. General manager (Recovery & Law) )
Allahabad Bank having his office at Netaji )
Subhash Road, Kolkata 700 001. )
5. The Willful Defaulter Review )
Committee of Allahabad Bank having its )
office at Netaji Subhash Road, )
Kolkata 700 001. )
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6. Reserve Bank of India, )
a Government of India undertaking having )
its Head Office at Shahid Bhagat Singh )
Marg, Mumbai 400 001 and also office at )
6, Sansad Marg, New Delhi - 110 001. )
7. Credit Information Bureau (India) )
Limited, a company incorporated under the )
Companies Act, 1956 and having its )
registered office at Hoechst House, )
6th Floor, 193 Backbay Reclamation. )
Nariman Point, Mumbai 400 021. ).. Respondents
WITH
WRIT PETITION NO. 2487 OF 2016
Deepen Arun Parekh )
Adult, Indian Inhabitant )
residing at 85, Navrang, Pedder Road, )
Mumbai 400 026. ).. Petitioner
Vs.
1. Allahabad Bank )
having its registered office at Netaji Subhas )
Road, Kolkata 700 001 having its )
branch office at 35-41, Hotel Hirmani )
Compound, Dr. Ambedkar Road, Patel, )
Mumbai 400 012. )
2. The Willful Defaulter Identification )
Committee of Allahabad Bank, having )
its office at Netaji Subhash Road, )
Kolkata 700 001. )
3. The Deputy Manager (Recovery) )
Allahabad Bank, having his office at Netaji )
Subhash Road, Kolkata 700 001. )
4. General manager (Recovery & Law) )
Allahabad Bank having his office at Netaji )
Subhash Road, Kolkata 700 001. )
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5. The Willful Defaulter Review )
Committee of Allahabad Bank having its )
office at Netaji Subhash Road, )
Kolkata 700 001. )
6. Reserve Bank of India, )
a Government of India undertaking having )
its Head Office at Shahid Bhagat Singh )
Marg, Mumbai 400 001 and also office at )
6, Sansad Marg, New Delhi - 110 001. )
7. Credit Information Bureau (India) )
Limited, a company incorporated under the )
Companies Act, 1956 and having its )
registered office at Hoechst House, )
6th Floor, 193 Backbay Reclamation. )
Nariman Point, Mumbai 400 021. ).. Respondents
Mr. Milind Sathe, Senior Advocate a/w Mr. Zal Andhyarujina, Mr. Punit
Damodar and Ms. Nikita Vardhan i/b. Kanga & Co. for the Petitioner.
Mr. N.N.Amin for the Respondents.
CORAM: R.M.SAVANT &
SMT.SADHANA S.JADHAV, JJ.
DATE : 27th June, 2017.
ORAL JUDGMENT: (Per R.M.Savant, J.)
Rule in each of the above Petitions. Considering the nature of
the challenge raised in the Petitions, made returnable forthwith and heard.
2. The writ jurisdiction of this Court under Article 226 of the
Constitution of India is invoked against the notice dated 17.8.2016 issued
by the Respondent No.4 declaring the Petitioners in each of the above
Petitions as willful defaulters. The Petitioner in Writ Petition No.2483 of
2016 has availed of financial facilities from the Respondent No.1-Bank.
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On the default committed by the Petitioner to repay the amount to the
Respondent No.1-Bank that proceedings were adopted by the Respondent
No.1 Bank to declare the Petitioners as willful defaulters. A Show Cause
Notice came to be issued on 7.4.2016 to the Petitioners on behalf of the
Willful Defaulter Identification Committee (WDIC for short) of the
Respondent No.1 Bank. There is no dispute about the fact that the
Petitioners have received the said Show Cause Notice. There is also no
dispute about the fact that the Petitioners have not responded to the said
Show Cause Notice, except by stating that they would later on revert to the
Respondent No.1 Bank as regards the said Show Cause Notice. The
Petitioners were thereafter served with the impugned notice dated
17.8.2016 declaring the Petitioner in Writ Petition No.2483 of 2016 and
other Petitioners, who are its non-executive Directors, as willful defaulters.
The said notice dated 17.8.2016 is principally challenged on the ground of
violation of the principles of natural justice inasmuch as it is the case of the
Petitioners that they were not granted a hearing either by the WDIC or the
Review Committee. There is no dispute about the fact that the Petitioners
were not heard by the WDIC or the Review Committee. The same is
sought to be justified by the learned counsel for the Respondent-Bank on
the ground that since the Petitioners did not respond to the Show Cause
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Notice, the order came to be passed by the WDIC as also the Review
Committee, as no request for hearing was made on behalf of the
Petitioners.
3. In the context of the challenge raised in the above Petitions, it
is required to be noted that the Show Cause Notice has been founded on the
grounds mentioned therein, which grounds contain the alleged defaults
committed by the Petitioner No.1 in Writ Petition No.2483 of 2016. In a
matter as serious as being declared a willful defaulter, the least that is
expected is that the parties are heard prior to issuance of any such
declaration. In the instant case, as indicated above, both at the stage of the
WDIC as also at the stage of the Review Committee, the Petitioners have
not been heard. In our view, therefore, the interest of justice would be
served if the notices dated 17.8.2016 are set aside and the matters are
remanded back to the WDIC for a de novo consideration. Hence, the
following directions :-
(i) The impugned Show Cause Notices dated 17.8.2016 are quashed and
set aside and the matters are remanded back to the WDIC for the Petitioners
being granted an opportunity of being heard in respect of the Show Cause
Notice dated 7.4.2016.
(ii) However, prior thereto, the Petitioners may be provided with the
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documents on which the show cause notice is founded, if asked for by the
Petitioners. The same to be done within four weeks of the request being
made by the Petitioners which would be within two weeks from date.
(iii) Needless to state that the WDIC would adjudicate upon the show
cause notice independently and without being influenced by the earlier
order dated 17.8.2016. The contentions of the Petitioners are kept open for
being urged before the WDIC.
(iv) The Petitioners would be granted a hearing either in person or
through Advocate. The learned counsel appearing for the Respondent No.1
Bank states that the Petitioners would be at liberty to avail of the services of
an Advocate if they so desire. Statement accepted.
(v) The WDIC would fix the hearing of which a notice would be
given to the Petitioners, which hearing to be fixed after six weeks from
date.
4. The Petitions are allowed to the aforesaid extent. Rule is
accordingly made absolute. Parties to bear their respective costs.
(SMT. SADHANA S.JADHAV, J.) (R.M.SAVANT,J.)
