Telangana High Court
Mrs. Rita B Parikh vs State Bank Of India on 19 June, 2025
HONOURABLE SRI JUSTICE N.V.SHRAVAN KUMAR
Writ Petition No.25226 of 2024
ORDER:
This writ petition is filed in the nature of writ of certiorari
calling for the records and quashing the proceedings of Fraud
Identification Committee of respondent No.1 dated 12.08.2024
and Order No.2024-25/14 dated 12.08.2024 issued by
respondent No.1.
2. Heard Mr.Vikram Pooserla, learned senior counsel for
the petitioners and Mr.Chithari Prabhakar, learned standing
counsel for respondent No.1. With their consent, this writ
petition is taken up for disposal.
3. The facts of the case in brief are that the petitioners
were Directors of M/s.Parikh Fabrics Private Limited
incorporated under Companies Act, 1956 for the purpose of
manufacturing and exporting of socks. The petitioners were
directors of the said Company from June 2002 to February
2019. The manufacturing facilities are located in APIIC
Industrial Park, Nellore District, Andhra Pradesh. The Company
entered into a four (4) term loan agreements with respondent
No.1/Bank for an amount of Rs.53,22,00,000/- which was
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sanctioned on 17.03.2010. It appears that thereafter the
company could not repay the loan and has come forward to
settle dues in One Time Settlement (OTS) sanctioned by
respondent No.1 on 31.10.2016. Thereafter, the company made
initial payment of Rs.10.56 Crores and in view of some delay,
respondent No.1 cancelled OTS on 14.05.2018. Thereafter,
respondent No.1 appointed Forensic Auditor to conduct audit of
the company. On 10.05.2019, the Forensic Audit report was
submitted by Auditor and on 19.09.2019 respondent No.1
declared the account of the company as 'fraud' under the RBI
guidelines dated 01.06.2017. The petitioner submits that he was
not informed about the said declaration and was not provided
with a copy of Forensic report.
4. On 08.03.2021, FIR was registered by Central Bureau of
Investigation, ACB, Hyderabad against the Company basing on
declaration of 'fraud'. Thereafter, petitioner No.1 has filed
Crl.P.No.2481 of 2021 before this Court to quash the
proceedings, and the same is pending for adjudication.
Thereafter, the Fraud Investigation Committee based on the
judgment rendered by Hon'ble Supreme Court in the case of
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State Bank of India v. Rajesh Agarwal 1 decided to reverse
the 1st declaration of fraud which came to notice of the
petitioner on 22.03.2024. Thereafter, a show cause notice dated
22.03.2024 was issued along with selective pages of the forensic
audit report.
5. Mr.Vikram Pooserla, learned senior counsel for the
petitioner would submit that only 4 pages of forensic report has
been supplied to the petitioner, to which the petitioner replied
on 12.04.2024 seeking a stock audit report and forensic audit
report. Thereafter, on 31.05.2024 respondent No.1/Bank replied
to the letter dated 12.04.2024 and has supplied stock audit
report. On 17.06.2024, through correspondence, the petitioner
sought copies of the forensic audit report in its entirety and on
17.08.2024 respondent No.1/Bank issued a letter enclosing the
impugned order dated 12.08.2024 which was received by the
petitioner on 22.08.2024.
6. Learned senior counsel further submits that the
Company was admitted into Corporate Insolvency Resolution
Process under the Insolvency and Bankruptcy Code, 2016 on
08.02.2019 and subsequently liquidation order was passed on
2023 6 SCC 1 pg.80
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21.01.2020. Learned senior counsel in support of his case
would rely on judgments of the Hon'ble Supreme Court in State
Bank of India v. Rajesh Agarwal 2 and Milind Patel v. Union
of India and others 3. He would further submit that RBI
introduced Master Directions on Fraud Risk Management on
15.07.2024 which mandate, must be strictly adhered prior to
declaration of 'fraud'. Learned senior counsel further drawn
attention of this Court to the copies of forensic report issued to
the petitioner along with show cause notice dated 22.03.2024. It
is further submitted that the said information furnished is not
sufficient to submit reply and unless entire forensic report is
available to the petitioner, the petitioner would not be in a
position to answer the reasons stated in the audit report.
7. Today, when the matter is taken up for hearing, learned
standing counsel for respondent No.1/Bank placed the entire
copy of forensic report and same was also served on learned
senior counsel for the petitioner. Learned senior counsel for the
petitioner would submit that the Forensic Audit Report is for the
period covering from April, 2010 to March, 2018 and would
submit that sometime may be granted for the petitioner to go
2023 SCC OnLine SC 342
2024 SCC OnLine Bom 745
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through the report and put forward their submissions and reply
accordingly.
8. In view of all the observations made above, the
proceedings of the Fraud Identification Committee of
Respondent No.1 dated 12.08.2024 and Order No.2024-25/14
dated 12.08.2024 issued by respondent No.1/Bank is hereby set
aside and the petitioner is granted time to put forward their
submissions to the extent of Forensic Audit Report is concerned.
Respondent No.1 is also granted liberty to issue fresh notice and
call for the objections from the petitioner and after giving a fair
opportunity of hearing to the petitioner, pass appropriate orders
by following due process of law.
9. Accordingly, this writ petition is disposed of. There shall
be no order as to costs.
Miscellaneous petitions, if any, pending in this writ
petition shall stand closed.
_____________________________
N.V.SHRAVAN KUMAR., J
19.06.2025
mrm
