Bombay High Court
Saket Kamleshkumar Agarwal vs Indian Overseas Bank on 31 July, 2023
Bench: G.S. Patel, Dr. Neela Gokhale
13-OSWPL-20215-2023.DOC
Arun
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 20215 OF 2023
Saket Kamleshkumar Agarwal ...Petitioner
Versus
Indian Overseas Bank ...Respondent
Mr Shyam Mehta, Senior Advocate, with Kunal Dwarkadas, Ranjit
Shetty, Rahul Dev & Risha Alva, i/b Argus Partners, for the
Petitioner.
Mr Raj Dani, i/b Thodur Law Associates, for the Respondent-Bank.
CORAM G.S. Patel &
Neela Gokhale, JJ.
DATED: 31st July 2023
PC:-
1. Prima facie, the Petition discloses sufficient grounds for an
urgent ad-interim time-limited order.
Digitally signed
by ARUN
RAMCHANDRA
ARUN SANKPAL
RAMCHANDRA
SANKPAL Date:
2023.08.01
10:31:40
+0530
2. We are surprised that though the 1st Respondent bank was
served five days ago by email and a little later in hard copy, it has not
found the time to instruct its Advocates.
3. The case arises under the Wilful Defaulters Master Circular
issued by the Reserve Bank of India ("RBI"). The matter of
procedure and specifically of the applicability of rules of natural
31st July 2023
13-OSWPL-20215-2023.DOC
justice is now fully covered by the judgement of the Supreme Court
in State Bank of India v Jah Developers Private Limited and Ors, 1 read
with the later Supreme Court judgment in T. Takano v Securities And
Exchange Board of India and Anr.2 The second judgement though in
the context of securities law makes it clear that there is a right to a
party against whom action is proposed to have all relevant material
disclosed and made available.
4. In the present, the entire show-cause notice is on the basis of
a forensic report. Despite repeated requests, this has never been
made available to the Petitioner.
5. The Petitioner has been told that he is a "director guarantor".
He accepts that he was a director. He has since resigned. But he has
consistently refuted the assertion that he was ever a guarantor. He
has asked for copies of the guarantee that he is supposed to have
signed. No such guarantee has ever been shown to him. The entire
presumption seems to be that because he was a director therefore he
is deemed to be a guarantor with an ongoing continuing guarantee.
6. There will have to be an ad-interim action in terms of prayer
clause (b) at page 32 which reads thus:
"(b) That pending the admission and disposal of this
Petition, this Hon'ble Court may be pleased to stay any
further action that may be taken by the Respondents against
the Petitioner pursuant to the Show Cause Notice dated
July 9, 2021 issued by the Respondents under the RBI
1 (2019) 6 SCC 787.
2 (2022) 8 SCC 162.
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13-OSWPL-20215-2023.DOC
Master Circular on Wilful Defaulters dated July 1, 2015."
7. Apart from anything else, decisions of the Supreme Court in
Jah Developers and State Bank of India and Ors v Rajesh Agarwal and
Ors3 (in the case of fraud circulars) point out the very serious civil,
commercial and other effects of such a declaration.
8. The matter has not yet gone to the Review Committee. The
Review Committee is not to take it up or pass any orders until
further orders of this Court. No credit rating agency is to be
informed of the order of the Wilful Defaulters Identification
Committee without specific leave of this Court.
9. The Affidavit in Reply is to be filed and served on or before
21st August 2023. A Rejoinder is to be filed and served on or before
28th August 2023.
10. List the Petition on 4th September 2023.
11. This order will continue until the next date.
(Neela Gokhale, J) (G. S. Patel, J)
3 2023 SCC OnLine SC 342.
31st July 2023
