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Calcutta High Court
Bhanu Properties And Anr vs Reserve Bank Of India And Anr on 6 January, 2026
Author: Rajasekhar Mantha
Bench: Rajasekhar Mantha
OD-1
ORDER SHEET
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
APOT/299/2025
IA NO:GA/1/2025, GA/2/2025
BHANU PROPERTIES AND ANR.
-VS-
RESERVE BANK OF INDIA AND ANR.
BEFORE:
The Hon'ble JUSTICE RAJASEKHAR MANTHA
And
The Hon'ble JUSTICE AJAY KUMAR GUPTA
Date: 06.01.2026.
Mr. D. Sarkar, Adv.; Mr. T. Ganeriwala, Adv.; Ms. D. Priya, Adv.; Mr. R. Agarwal, Adv.;
Ms. A. Choudhury, Adv., for petitioners.
Ms. S. Ghosh, Adv., for R-1.
Ms. S. Ojha, Adv.; Ms. S.B. Chatterjee, Adv., for Axis Bank.
1.
The Court: This appeal is directed against the judgment and order dated August
26, 2025, whereby and whereunder the Single Bench refused to interfere with the
declaration by the Axis Bank, of the accounts of the petitioners, as fraudulent.
2. The writ petition was filed challenging an order declaring the petitioners' account
as fraudulent, as communicated to the petitioners on March 5, 2024.
3. The grievance of the petitioners is that the stock audit reports relied upon by the
Bank for such declaration have not been furnished to the petitioners. The Single
Bench refused to interfere with the declaration of the petitioners' account as
fraudulent for the reasons stated in the impugned order.
4. During the pendency of the writ petition, the appellants-borrowers entered into a
settlement with the Bank and paid off all the outstanding dues as agreed by and
between them. The bank accounts of the appellants have since been declared as
settled by the Bank.
5. This Court notes that despite the account of the appellants being declared as
fraudulent and fraud having been alleged against the appellants-borrowers in
filing inflated stock audit reports, the Bank has not reported the matter to the law
enforcement agencies in terms of clause 6(1) & (2) of the concerned Master
Circular of the Reserve Bank of India. There are, therefore, no criminal
proceedings initiated or pending against the appellants-borrowers.
6. On being enquired, the Bank and the RBI have not been able to indicate to the
Court as to whether the appellants have been listed as fraudsters in the list
published by the RBI. It has not been indicated as to whether the stock
exchanges concerned have been notified.
7. The Bank and the RBI seek time to obtain instructions in this regard.
8. This Court has indicated to counsel for the Bank that failure to notify the law
enforcement agencies is itself violation of the RBI Master Circular on fraudulent
accounts. A corresponding liability on the staff and senior executives of the Bank
could be imposed for not notifying the law enforcement agencies. Enforcement of
an early settlement may also be one of such reasons.
9. These are only prima facie observations of this Court. The Bank shall file a
detailed affidavit as regards its omission to notify the law enforcement agencies as
also as to whether the appellants have been listed as one who have committed
fraud on the website of the RBI and as to whether the stock exchanges have been
notified or any steps have been taken against the staff and senior executives of
the Bank shall also be indicated.
10. The affidavit of the Bank shall also contain evidence to show that all stock audit
reports relied upon by the Bank for declaring the appellants as fraudsters were
duly notified/supplied to the appellants before declaring them as fraudsters.
11. As an interim measure, this Court directs that if the Bank has not notified the
RBI and the RBI has not published the names of the appellants as fraudsters on
their website and the stock exchanges have not been informed, the Bank and
RBI shall, until further orders of this Court, not make any such reporting or
publication or notification.
12. List the matter on January 20, 2026.
13. The affidavit as directed above may be filed by Friday next. Reply, if any, may be
filed on or before the adjourned date.
(RAJASEKHAR MANTHA, J.)
(AJAY KUMAR GUPTA, J.)
tk
