Madras High Court
K.Indira Priyadarshini vs Reserve Bank Of India on 4 October, 2023
W.P.Nos.15964 of 2023, 10454, 11669 & 11671 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 04.10.2023
CORAM
THE HONOURABLE DR. JUSTICE ANITA SUMANTH
W.P.Nos.15964 of 2023 & 10454, 11669 & 11671 of 2022
and WMP.Nos.15407, 15409 & 15413 of 2023
and WMP.Nos.10156, 10157, 11134, 11135, 11137 & 11138 of 2022
and WMP.Nos.28491, 28492, 28493 & 28495 of 2023
WP.No.15964 of 2023
K.Indira Priyadarshini ... Petitioner
vs.
1.Reserve Bank of India
Mumbai Regional Office,
Shahid Bhagat Singh Marg,
Kala Ghoda, Fort, Mumbai,
Maharashtra 400001.
2.Central Bureau of Investigation
Banking Securities Fraud Branch,
Represented by Inspector of Police,
Having office at:
Plot No.5-B, CGO Complex,
Lodhi Road, New Delhi-110003
3.State Bank of India
Represented by S.Ravichandran
Deputy General Manager,
https://www.mhc.tn.gov.in/judis
1
W.P.Nos.15964 of 2023, 10454, 11669 & 11671 of 2022
Stressed Assets Management Branch
No.32, Red Cross Building,
Indian Red Cross Society,
Egmore, Chennai-600 008
Also at:
12th Floor, State Bank Bhavan,
Madame Cama Road, Nariman Point,
Mumbai-400021.
4.Axis Bank,
Corporate Banking Branch,
Karumuthu Nilayam,
Ground Floor, No.192, Anna Salai,
Chennai-600 002.
5.IL & FS Financial Services Ltd.,
The IL&FS Financial Centre,
Plot C – 22, G Block, Bandra Kurla Complex Bandra East,
Mumbai 400 051.
6.UCO Bank,
Flagship Corporate Branch,
6-3-1108, Ground Floor,
Navabarath Chambers, Raj Bhavan Road,
Somajiguda, Hyderabad-500 082.
Also at
Head Office at No.10, BTM
Sarani Kolkatta-700 001.
7.Syndicate Bank,
(Currently merged with Canara Bank)
SAMG Branch,
16/38, SIC Building, 1st Floor, Anna Salai,
Chennai-600 002
8.Bank of India,
Khairtabad Branch, PTI Building, Ground Floor,
https://www.mhc.tn.gov.in/judis
2
W.P.Nos.15964 of 2023, 10454, 11669 & 11671 of 2022
10-01-1199/2, AC Guards, Hyderabad-500 004.
Head Office at:
Star House C-5, G-Block, 3rd floor,
Bandra Kurla Complex, Bandra (E),
Mumbai-400 051.
9.Punjab National Bank,
Large Corporate Branch, Centenary Building,
28, MG Road, Bangalore-560 001.
Head Office at:
Plot No.4, Sector 10, Dwarka, New Delhi-110 066.
10.Indian Overseas Bank,
RP Road Branch, Kasuva Complex,
RP Road, Secunderabad-500 003
Head Office at:
No.762, Anna Salai, Chennai-600 002. ... Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of India,
praying to (i) issue a Writ of Declaration to declare that the Reserve Bank of
India (Frauds classification and reporting by commercial banks and select FIs)
Directions, 2016 dated 01.07.2016 inter alia on the ground that they are ultra
vires Section 35A of the Banking Regulation Act, 1949, arbitrary,
unconstitutional and untenable in law and (ii) issue a Writ of Certiorarified
Mandamus to call for and quash the resolution passed by the Fraud
Identification Committee, Stressed Assets Resolution Group of the Respondent
herein in its meeting held on 14.09.2020 as arbitrary and untenable in law.
AND
https://www.mhc.tn.gov.in/judis
W.P.Nos.15964 of 2023, 10454, 11669 & 11671 of 2022
WP.Nos.10454, 11669 & 11671 of 2022
Kanumuru Rama Devi ... Petitioner in WP.10454 of 2022
Narayan Prasad Bhagavathula ... Petitioner in WP.11669 of 2022
Kanumuru Raghu Rama Krishna Raju ... Petitioner in WP.11671 of 2022
vs.
State Bank of India
Represented by S.Ravichandran
Deputy General Manager,
Stressed Assets Management Branch
No.32, Red Cross Building,
Indian Red Cross Society, Egmore, Chennai-600 008
Also at:
12th Floor, State Bank Bhavan,
Madame Cama Road, Nariman Point
Mumbai-400 021 ... Respondent in WP.Nos.10454,
11669 & 11671 of 2022
Prayer in WP.Nos.10454, 11669 & 11671 of 2022: Writ Petitions filed under
Article 226 of the Constitution of India, praying to issue a Writ of Declaration
to declare that the Resolution passed by the Fraud Identification Committee,
Stressed Assets Resolution Group of the Respondent herein in its meeting held
on 14.09.2020, of which the copy was not served to the Petitioner is arbitrary,
illegal, non-est and untenable in law.
(The date of the impugned resolution amended vide order dated 26.06.2023
made in WMP.Nos.17298, 17300 & 17299 of 2023 in WP.Nos.10454, 11669 &
11671 of 2022 by this Court)
https://www.mhc.tn.gov.in/judis
W.P.Nos.15964 of 2023, 10454, 11669 & 11671 of 2022
Case Nos. For Petitioners For Respondents
WP.15964 of 2023 Mr.Sathish Parasaran Mr.C.Mohan (for R1)
for Mr.Anirudh Krishnan for King & Patridge
Mr.K.Srinivasan (for R2)
Special Public Prosecutor
(CBI)
Mr.M.L.Ganesh (for R3)
Mr.Abdul Wahab (for R7)
No Appearance (for R4,
R5, R6, R9 & R10)
WP.Nos.10454 & Mr.M.S.Krishnan, Mr.M.L.Ganesh
11669 of 2022 Senior Counsel
for Mr.Anirudh Krishnan
WP.11671 of 2022 Mr.Challa Kodanda Ram Mr.M.L.Ganesh
Senior Counsel
for Mr.Anirudh Krishnan
COMMON ORDER
Only the miscellaneous petitions seeking injunction and fixation of early
date are listed today. However, bearing in mind Memo dated 04.10.2023 filed
by Mr.M.L.Ganesh, learned counsel appearing for the State Bank of India, the
detailed submissions made by all learned Senior Counsel for the petitioners and
respondents, this Court finds that the writ petitions may themselves be
https://www.mhc.tn.gov.in/judis
W.P.Nos.15964 of 2023, 10454, 11669 & 11671 of 2022
disposed. Hence, Registry has been directed to list the main writ petitions as
well, and they are so listed under a special list.
2.A common order is passed in these cases since all writ petitioners have
sought writs declaring a resolution passed by the Fraud Identification
Committee, Stressed Assets Resolution Group of the Respondent in its meeting
held on 14.09.2020, (a copy of which has not been served upon the petitioners)
as 'fraud'. Based on the aforesaid Resolution, proceedings have been initiated as
against the petitioners.
3.That a copy of the resolution has not been made available to the
petitioners is admitted seeing that the respondent/State Bank of India have
themselves stated in counter dated 15.06.2022 that the declaration of the
borrower as 'fraud' is as per the extant guidelines of the Reserve Bank of India
and the said guidelines do not provide for sharing of a copy of the said
resolution to the borrower.
4.Be that as it may, Mr.Ganesh, learned counsel appearing for the State
Bank of India, has filed a memo dated 04.10.2023 common to all writ petitions,
which reads as follows:
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W.P.Nos.15964 of 2023, 10454, 11669 & 11671 of 2022
'It is respectfully submitted that fraud cases declared prior
to Hon'ble Supreme Court Judgement dated 27.03.2023, SBI has
reported to RBI and accordingly SBI has decided to "reverse"
classify the fraud decision and further decided to issue show
cause notice to the Borrower's/ Guarantor's.
It is further submitted that if no response from Borrower's/
Guarantor's, pursuant to the issuance of show cause notice, the
Lender institution will declare fraud in accordance with law. The
reclassified fraud will be intimated to the RBI as per prevailing
guidelines.
It is therefore respectfully prayed that in the light of
Hon'ble Apex Court Judgment and RBI guidelines, SBI has
decided to follow reverse classification process and intends to
conduct fresh fraud proceedings in accordance with law.
It is therefore prayed that the aforesaid statement may be
recorded with regard to fraud declaration alone and thus render
justice.'
5.He would confirm the position that the impugned resolution is being
reversed and with it, the decision to classify the petitioners as 'fraud'. The State
Bank of India will issue show cause notice if at all they intend to proceed with
fresh proceedings proposing to classify the petitioners as 'fraud'. In light of
memo dated 04.10.2023 filed now, the challenge to the Resolution no longer
survives as the Resolution itself does not survive any further. Recording the
same, these writ petitions are closed.
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W.P.Nos.15964 of 2023, 10454, 11669 & 11671 of 2022
6.Parties also bring to the Court's notice that proceedings have been
initiated by the Central Bureau of Investigation that are proceeding parallely.
7.All parties confirm that they do not pursue any prayer as against the
Central Bureau of Investigation in these writ petitions, and at this stage. No
costs. Consequently, connected miscellaneous petitions are also closed.
04.10.2023
vs
Index : Yes/No
Speaking order
Neutral Citation : Yes
To
1.Reserve Bank of India
Mumbai Regional Office,
Shahid Bhagat Singh Marg,
Kala Ghoda, Fort, Mumbai,
Maharashtra 400001.
2.Central Bureau of Investigation
Banking Securities Fraud Branch,
Represented by Inspector of Police,
Having office at:
Plot No.5-B, CGO Complex,
Lodhi Road, New Delhi-110003
3.State Bank of India
Represented by S.Ravichandran
Deputy General Manager,
Stressed Assets Management Branch
https://www.mhc.tn.gov.in/judis
W.P.Nos.15964 of 2023, 10454, 11669 & 11671 of 2022
No.32, Red Cross Building, Indian Red Cross Society,
Egmore, Chennai-600 008
Also at:
12th Floor, State Bank Bhavan,
Madame Cama Road, Nariman Point,
Mumbai-400021.
4.UCO Bank,
Flagship Corporate Branch,
6-3-1108, Ground Floor,
Navabarath Chambers, Raj Bhavan Road,
Somajiguda, Hyderabad-500 082.
Also at
Head Office at No.10, BTM
Sarani Kolkatta-700 001.
5.Syndicate Bank,
(Currently merged with Canara Bank)
SAMG Branch,
16/38, SIC Building, 1st Floor, Anna Salai,
Chennai-600 002
6.Bank of India,
Khairtabad Branch, PTI Building, Ground Floor,
10-01-1199/2, AC Guards, Hyderabad-500 004.
Head Office at:
Star House C-5, G-Block, 3rd floor,
Bandra Kurla Complex, Bandra (E),
Mumbai-400 051.
7.Punjab National Bank,
Large Corporate Branch, Centenary Building,
28, MG Road, Bangalore-560 001.
Head Office at:
Plot No.4, Sector 10, Dwarka, New Delhi-110 066.
https://www.mhc.tn.gov.in/judis
W.P.Nos.15964 of 2023, 10454, 11669 & 11671 of 2022
Dr.ANITA SUMANTH, J.
vs
8.Indian Overseas Bank,
RP Road Branch, Kasuva Complex,
RP Road, Secunderabad-500 003
Head Office at:
No.762, Anna Salai, Chennai-600 002.
W.P.Nos.15694 of 2023 & 10454, 11669 & 11671 of 2022
and WMP.Nos.15407, 15409 & 15413 of 2023
and WMP.Nos.10156, 10157, 11134, 11135, 11137 & 11138 of 2022
and WMP.Nos.28491, 28492, 28493 & 28495 of 2023
04.10.2023
https://www.mhc.tn.gov.in/judis
