Girdhari Nyati vs Punjab National Bank
2021 Latest Caselaw 7294 MP

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         THE HIGH COURT OF MADHYA PRADESH
                     BENCH AT INDORE
         (S.B.: HON'BLE Mr. JUSTICE VIVEK RUSIA)
                   Writ Petition No.24522/2021
             (Girdhari Nyati Vs. Punjab National Bank)
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       Shri Akshat Agrawal, learned counsel for the Petitioner .
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                                    ORDER

Date: 11.11.2021:

The petitioners have filed the present petition being aggrieved by the communication dated 05.10.2021 whereby they have been declared as willful defaulters by the Willful Defaulter Identification Committee (hereinafter referred as to " respondent No.2).The petitioners are apprehending that the respondent No.3 Review Committee may not provide the desire documents, personal hearing in terms of guidelines issued by Reserve Bank of India (hereinafter referred as to " RBI"). Hence, present petition before this Court. (2) The petitioners are ex-directors of M/s Divya Jyoti Industries Ltd. a company incorporated under the provision of the Companies Act, 1956. The company is facing insolvency proceedings before the National Company Law Tribunal Indore Bench at Ahmadabad. According to the petitioners, the respondent No.1 to 6 and 7 being one of the financial creditor and member of the Committee of the Creditors 'COC' having complete knowledge about the pendency of the aforesaid proceedings has wrongly initiated the proceedings under the master circular issued by the RBI and declared the petitioners as willful defaulters. A show cause notice was issued to the petitioners on 13.07.2021 being directors of M/s Divya Jyoti Industries Ltd.. The petitioner No.2 submitted a reply dated 30.10.2021 raising various objections and demanding the documents, thereafter the matter was placed before the respondent No.2/committee. The committee in its meeting held on 23.09.2021

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has classified the petitioners as willful defaulters and now the respondent No.3 review committee has issued a show cause notice to the petitioners. According to the petitioners before the aforesaid declaration no opportunity of hearing, documents etc. were provided and in utter violation of principle of natural justice, they have been declared as willful defaulters. Now they are apprehending that even the review committee is not going to supply the desire documents and may affirm the order passed by respondent No.2. (3) Shri Agrawal has placed the reliance over the judgment passed by High Court of Judicature at Bombay in case of Finolex Industries Limited and another Vs. Reserve Bank of India and others WPL/345/2011 and connected Matter, decided on 23/24th August, 2011 in which it has been held that non furnishing the documents amounted to a violation of principle of natural justice and decision to classify the unit as willful defaulter arrived at violation of principle of natural justice not sustainable in law. (4). The petition is based on apprehension of the petitioners, not liable to be entertained at this stage before this Court. The matter is pending before the respondent No.3/Review Committee. The petitioners have already submitted detailed reply to the show cause notice demanding the various documents. The petitioners may personally appear and request for supply of the documents. This Court has no reason to believe that the respondent No.3/committee shall not supply the necessary documents, if already not provided to the petitioner earlier.

With the aforesaid observation, petition is disposed of.

( VIVEK RUSIA ) JUDGE praveen

Digitally signed by PRAVEEN NAYAK Date: 2021.11.12 17:55:16 +05'30'