Delhi High Court - Orders
Adigear International & Ors vs Indian Overseas Bank & Anr on 16 September, 2021
Author: Prateek Jalan
Bench: Prateek Jalan
$~48 (2021 Cause List)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 10330/2021
ADIGEAR INTERNATIONAL & ORS. ..... Petitioners
Through: Mr. Hrishikesh Baruah and Mr
Pranav Jain, Advocates.
versus
INDIAN OVERSEAS BANK & ANR. ..... Respondents
Through: Mr. Neelanshu Roy, Advocate for
R-1.
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
ORDER
% 16.09.2021 The proceedings in the matter have been conducted through video conferencing.
CM APPL. 31804/2021 (for exemption) Exemption allowed, subject to all just exceptions. This application stands disposed of.
W.P.(C) 10330/2021 & CM APPL. 31803/2021 (for interim relief)
1. Issue notice. Mr. Neelanshu Roy, learned counsel, accepts notice on behalf of respondent No.1-Indian Overseas Bank. Notice be served upon the remaining respondent by all permissible modes, dasti in addition, and also through Standing Counsel, if any.
2. The challenge in the present petition is to the Master Circular of the Reserve Bank of India ["RBI"] [respondent no.2 herein] dated 01.07.2016, regarding declaration of accounts as fraud accounts.
3. It is submitted by Mr. Hrishikesh Barua, learned counsel appearing Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:17.09.2021 21:41:26 W.P.(C)10330/2021 Page 1 of 3 for the petitioners, that the account of the petitioner no.1 in the respondent no.1/Bank has been declared as a fraud account, without compliance with the principles of natural justice.
4. The same Master Circular of the RBI has been challenged in several writ petitions before this Court. This Court, by interim orders dated 15.02.2019 and 16.06.2019 in W.P.(C)306/2019, has granted interim relief in favour of the petitioner therein. These orders have been followed in several subsequent orders.
5. The petitions challenging the validity of the master circular itself are pending consideration in this Court, including W.P.(C) 306/2019 and connected matters. The Court is considering the requirements of the principles of natural justice in the context of the said circular, which will have a bearing on the adjudication of the present case also.
6. In these circumstances, the respondents are directed to maintain status quo with regard to the declaration of the account of the petitioner no.1 as a fraud account and from taking any further steps pursuant thereto. The respondents are free, however, to issue a show cause notice to the petitioners and pass a reasoned order after giving them a hearing, if necessary through video-conferencing. It is also made clear that any investigation, inquiry or other proceedings may continue in accordance with law.
7. It is made clear that this order does not inhibit investigation, inquiry or other criminal proceedings, nor does it inhibit the right of the petitioner no.1 to defend himself in those proceedings or take such remedies in criminal law, as he may be entitled. The fact that the transactions involved in the criminal proceedings and in the declaration of Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:17.09.2021 21:41:26 W.P.(C)10330/2021 Page 2 of 3 the petitioner no.1's account as a fraud account may be the same or overlap does not preclude the investigating agencies and the criminal courts from proceeding in accordance with law as far as those proceedings are concerned, subject to the remedies available to the petitioner under the Code of Criminal Procedure, 1973.
8. Counter-affidavit be filed within four weeks. Rejoinder thereto, if any, be filed within two weeks thereafter.
9. List on 23.09.2021.
PRATEEK JALAN, J SEPTEMBER 16, 2021/'vp' Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:17.09.2021 21:41:26 W.P.(C)10330/2021 Page 3 of 3