Calcutta High Court
Gaurav Dalmia vs Reserve Bank Of India & Ors on 6 April, 2017
Author: Debangsu Basak
Bench: Debangsu Basak
ORDER SHEET
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
ORIGINAL SIDE
WP No. 173 of 2017
GAURAV DALMIA
Versus
RESERVE BANK OF INDIA & ORS.
WP No. 174 of 2017
RAGHU HARI DALMIA
Versus
RESERVE BANK OF INDIA & ORS.
BEFORE:
The Hon'ble JUSTICE DEBANGSU BASAK
Date : 6th April, 2017.
Mr. Jishnu Saha, Sr. Adv.
Mr. Anirban Ray, Adv.
Mr. Ishan Saha, Adv.
Ms. Soumali Basu, Adv.
...for the petitioner
Mr. Pratap Chatterjee, Sr. Adv.
Mr. Siddhartha Banerjee, Adv.
Mr. Soumabho Ghose, Adv.
Mr. Suchayan Bandyopadhyay,Adv.
...for the respondent bank
Mr. Debdutta Sen, Mrs. Suchishmita Chatterjee, Advs.
...for RBI The Court : Two writ petitions are taken up for analogous hearing as they concern the same issue.
2
The writ petitioners in the two writ petitions are individuals who were the directors of a limited liability company and claim to be in the control and management of the company despite their resignation as directors.
Learned senior advocate for the petitioners submit that, the petitioners were not issued notices under the master circular on wilful defaulters issued by the Reserve Bank of India dated July 1, 2015. He submits that although the company has been declared as wilful defaulters, the petitioners stand prejudiced as they were not afforded an opportunity of hearing by the identification committee contemplated under the master circular. The petitioners have a right of hearing or at least making a representation before the identification committee. The principles of natural justice stand breached by the actions of the bank in not issuing any notice to the petitioners and not affording the petitioner an opportunity of hearing.
Learned senior advocate appearing for the bank relies on (2006) 8 Supreme Court Cases 647 (Punjab National Bank vs. Manjeet Singh) and submits that, where a right of hearing is an idle formality, the same need not be enforced by a Court of law. He submits that, in the present case, the company has been found to be guilty of diversion of fund. The persons in control and management of the company cannot be said to 3 be not guilty of such diversion of fund. The petitioners have not placed any material before the Court to suggest that there is anything new or different to that what was said by the company in the proceeding for identification of the company as wilful defaulter. He submits that, the petitioners had represented the company in such proceeding.
The master circular dated July 1, 2015 requires the identification committee to issue a show cause notice to the concerned borrower and directors and call for their submissions. The identification committee is at liberty to issue an order recording the fact of wilful defaulter and the reasons for the same after considering the submissions as called for.
In the present case, no evidence is produced before the Court to suggest that the identification committee had issue a show cause notice to the petitioners. A bunch of document is relied upon on behalf of the bank. It contains a letter dated December 1, 2016 issued by the bank to the company. Copy of such letter is forwarded to petitioners herein apart from other natural persons as also to the then advocate for the company. The letter however does not speak of the desire of the bank to proceed to declare the petitioners involved herein as wilful defaulters under the Master Circular. Consequently it can be reasonably inferred that, the petitioners were not given any notice under Master Circular. They were not 4 provided with an opportunity of making a representation to the identification committee for wilful defaulter.
The identification committee has already declared the company as wilful defaulter. The writ petition challenging such declaration has failed. The review committee is yet to consider such declaration of the identification committee. The company has however refused to accept the offer of the bank to appear before the review committee being represented by an advocate or by itself.
In such factual background it would be appropriate to permit the petitioners to submit a representation to the identification committee of the bank within 10 days from date. The petitioners before me are at liberty to deal with the allegations of the bank as contained in the writing dated January 24, 2017 read with the findings of the identification committee as against the company, the charge of diversion of fund by the company as acknowledged by the company's writings dated July 20, 2015 and the advocate's letter dated September 2, 2016. The petitioners have also admitted to be in the management and control of the company despite their resignation as directors of the company, in the meetings held with the bank. The reply of the petitioners must reach the office of the identification committee within ten days from date. In addition to delivery of the reply to the concerned bank, the petitioners are at liberty to send the reply to the 5 electronic mail identity of the learned advocate-on-record for the bank being [email protected] . The identification committee as well as the review committee are at liberty to proceed in accordance with law in terms of the master circular in respect of the petitioners, after 10 days from date.
The decision of the identification committee to declare the petitioners as wilful defaulter is set aside. This order of setting aside will not affect the other decision taken by the identification committee in such meeting in respect of others.
W.P. No. 173 of 2017 and W.P. No. 174 of 2017 are disposed of. No order as to costs.
(DEBANGSU BASAK, J.) TR/