Subhash Kedarnath Tibrewal vs Bank Of Baroda on 21 September, 2020

[Cites 3, Cited by 1]

Gujarat High Court

Subhash Kedarnath Tibrewal vs Bank Of Baroda on 21 September, 2020

Bench: G.R.Udhwani

          C/SCA/7884/2020                                      ORDER




             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
               R/SPECIAL CIVIL APPLICATION NO. 7884 of 2020
==========================================================
                       SUBHASH KEDARNATH TIBREWAL
                                  Versus
                             BANK OF BARODA
==========================================================
Appearance:
MS SANGITA PAHWA FOR THAKKAR AND PAHWA ADVOCATES(1357)
for the Petitioner(s) No. 1,2
BHASKAR SHARMA(9209) for the Respondent(s) No. 1
JUHI D CHAVDA(8626) for the Respondent(s) No. 1
==========================================================
 CORAM:HONOURABLE MR. JUSTICE G.R.UDHWANI

                              Date : 21/09/2020

                               ORAL ORDER

1. The petition is filed seeking following prayers:

"9 (A). Your Lordships may be pleased to issue a writ of mandamus, or any other appropriate writ, order or direction, quashing and setting aside the impugned order dated 6.6.2020 passed by the respondent- Bank identifying the account of petitioners as Willful Defaulters as being illegal, unreasonable, unjustified, in breach of the principles of natural justices, arbitrary as also violative of Art.14. 19(1)(g), 21 of the Constitution of India;

       (B)     xxxxx
       (C)     xxxxx".

2. At the outset it is required to be noted that concededly the petitioner no.2- Mr. Vimal Desai has not supported his case by filing affidavit as required by the Gujarat High Court Rules and thus the petition at his instance would not be maintainable as rightly pointed out by learned counsel Mr. Sharma for the respondent. The petition is therefore disposed of qua Mr. Vimal Desai while leaving it open for him to file a petition appropriately in accordance with the Gujarat High Rules.

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3. The petitioner no.1- Subhash Kedarnath Tibrewal has been declared as Willful Defaulter and submission is made while relying upon M/s Kanchan Motors and Ors. vs. Bank of India and Ors.

- (2018) SCC Online 1761 as also the order passed by the division bench of this court in Tax Appeal No. 1570 of 2009 (Anil Products Limited vs. Commissioner of Central Excise, Ahmedabad) that the principles of natural justice have been violated as the petitioner was not served with the report of the review committee nor is the impugned order a reasoned/speaking order.

4. Learned counsel for the respondent has supported the impugned order.

5. Considering the above said short issue involved in the petition, the petition is taken up for final disposal at the notice stage.

6. Perusal of the impugned order would indicate that certain conclusions are recorded in paragraph no.4 as under:

"4. Xxxxxx In the light of the aforesaid facts and circumstances, after hearing and perusing the documents on record the Committee of Executives on Willful Defaulters (COE) of bank has decided to declare M/s Sarthak Creation Pvt. Ltd and it directors Mr. Subhas K. Tibrewala, Mr. Vimal Kumar Sureshbhai Desai as 'Willful Defaulters' on the grounds mentioned in the show cause notice, after concluding that company has defaulted in meeting its payment/repayment obligation to the lender and siphoned off the funds to that the funds have neither utilized for the specific purpose for which finance was availed of, nor are the funds available with the company in the form of other assets."

6.1 It is clear from the aforesaid observations that the findings as to siphoning off the funds or non-utilization of the funds or divergence of Page 2 of 3 Downloaded on : Mon Sep 21 23:00:42 IST 2020 C/SCA/7884/2020 ORDER borrowings or non-availability of the assets are not supported by material worth the name and thus the order is non speaking order. It has inter alia been held in M/s Kanchan Motors and Ors. (supra) that order must be a speaking order before declaring the borrowers as 'Willful Defaulters'. On this ground itself the impugned order is liable to be quashed and set aside. Accordingly impugned order is quashed and set aside. It will however be open for the respondent to take the subject again after extending appropriate opportunity to the petitioner and it will be open for the petitioner to raise all the contentions as may be advised and the respondent will deal with such contentions. The petition is disposed of with the above observations and directions.

(G.R.UDHWANI, J) MOHMMEDSHAHID/NIRU/SONGARA Page 3 of 3 Downloaded on : Mon Sep 21 23:00:42 IST 2020

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