Delhi High Court - Orders
Mr Ramchandra Purohit And Anr vs Punjab National Bank And Anr on 17 July, 2025
$~62
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 10059/2025 & CM APPL. 41808/2025
MR RAMCHANDRA PUROHIT AND ANR .....Petitioners
Through: Mr. J. Sai Deepak, Sr. Adv. with Mr.
Varun Garg, Mr. Nipun Gupta, Mr.
Nishpreha Mittal, Mr. Luv Virmani
and Mr. Prashant Jain, Advs.
versus
PUNJAB NATIONAL BANK AND ANR .....Respondents
Through: Mr. Santosh Kumar Rout, Standing
Counsel with Ms. Dharna Veragi and
Mr. Aditya, Advs. for R-1/PNB.
CORAM:
HON'BLE MR. JUSTICE VIKAS MAHAJAN
ORDER
% 17.07.2025
1. The present petition has been filed assailing show cause notice dated 19.09.2024 and notices of personal hearing dated 03.07.2025 and 05.07.2025.
2. Mr. J. Sai Deepak, learned Senior Counsel appearing on behalf of petitioners submits that petitioners were given show cause notice dated 19.09.2024, however, relevant documents on which the said show cause notice is premised were not provided to the petitioners.
3. He refers to said show cause notice to contend that the account was declared NPA on 28.09.2017, however, show cause notice came to be issued only on 19.09.2024 i.e. after a period of seven years.
4. He submits that petitioners vide e-mail dated 11.01.2025 had asked This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/07/2025 at 21:29:40 from respondent no.1 bank to furnish documents which were enumerated therein.
5. He invites attention of the Court to reply of respondent no.1 bank dated 21.01.2025 to submit that the said documents have not been furnished and the stand taken by respondent no.1 bank is that copy of the forensic audit report has been enclosed. He submits that forensic audit report does not contain all the documents which have been enumerated in e-mail dated 11.01.2025.
6. He invites attention of the Court to order dated 28.05.2025 passed by the Review Committee of respondent no.1/bank in 'Wilful defaulter' proceedings wherein there is specific reference to an earlier forensic audit report dated 24.07.2019 prepared by the same auditors namely, M/s BDO India LLP.
7. He also invites attention of the Court to letter of said auditors, dated 26.06.2021 addressed to the Deputy General Manager of respondent no.1/bank, to contend that the said letter also mentions the date of engagement of auditors as 19.01.2019, which supports the contention that there is a forensic audit report of July, 2019 as well.
8. He submits that forensic audit report only of June, 2021 has been furnished to petitioners and that too without any annexures.
9. Mr. Deepak submits that it is mandatory on the part of respondent no.1/bank to furnish not only the documents which have been referred to in show cause notice but all other documents which are relevant to the controversy.
10. He submits that the company namely, M/s Radiant Bizcom Pvt. Ltd. was in Corporate Insolvency Resolution Process (CIRP) and was eventually This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/07/2025 at 21:29:40 liquidated, therefore, all the relevant documents/data were handed over by petitioners to Resolution Professional (RP), therefore, petitioners do not have any documents available with them. Hence, a request was made for furnishing all relevant documents.
11. He also places reliance on the decision of Hon'ble Supreme Court in T. Takano v. Security and Exchange Board of India and Another, (2022) 8 SCC 162 wherein it was observed that as a default rule, all relevant material must be disclosed. The relevant part of the said decision reads thus:
"29. The purpose of disclosure of information is not merely individualistic, that is to prevent errors in the verdict but is also towards fulfilling the larger institutional purpose of fair trial and transparency. Since the purpose of disclosure of information targets both the outcome (reliability) and the process (fair trial and transparency), it would be insufficient if only the material relied on is disclosed. Such a rule of disclosure, only holds nexus to the outcome and not the process. Therefore, as a default rule, all relevant material must be disclosed.
30. It would be fundamentally contrary to the principles of natural justice if the relevant part of the investigation report which pertains to the appellant is not disclosed. The appellant has to be given a reasonable opportunity of hearing. The requirement of a reasonable opportunity would postulate that such material which has been and has to be taken into account under Regulation 10 must be disclosed to the noticee. If the report of the investigating authority under Regulation 9 has to be considered by the Board before satisfaction is arrived at on a possible violation of the regulations, the principles of natural justice require due disclosure of the report."
(emphasis supplied)
12. Reliance is also placed by Mr. J. Sai Deepak on the decision of Division Bench of the High Court of Bombay in Milind Patel v. Union Bank of India and Others, 2024 SCC OnLine Bom 745. Relevant This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/07/2025 at 21:29:40 paragraphs on which emphasis has been laid down by Mr. J. Sai Deepak reads thus:
"25. A plain reading of Takano [T. Takano v. Securities and Exchange Board of India, (2022) 232 Comp Cas 136 (SC); (2022) 8 SCC 162; (2022) 3 SCC (Cri) 306; (2022) 4 SCC (Civ) 248.] would throw light on how the Master Circular must be construed. The Master Circular consciously enables inflicting "penal"
consequences, and underlines the "imperative" need to adhere to a "transparent mechanism". The avoidance of information asymmetry and the means of ensuring transparency as outlined by the hon'ble Supreme Court in Takano [T. Takano v. Securities and Exchange Board of India, (2022) 8 SCC 162 would necessarily mean that principles of natural justice, including the need to provide the underlying material, are inherent and implicit in the process stipulated under the Master Circular. The material and information in question for disclosure to the noticee would be all "relevant" material and not just information that is "relied upon" or "referred to" in the show-cause notice.
26. Not only must information that is referred to and relied on in the show-cause notice be supplied but also information that may undermine the allegations contained in the show-cause notice (which may therefore not be referred to or relied on) must be supplied only to ensure that everything relevant to arrive at the truth is available to both parties. The objective of the proceedings initiated by issuance of a show-cause notice is not to somehow find the noticee guilty of wilful default on the same terms as alleged. Instead, the objective is to arrive at the truth as to whether or not an individual in question is to be subjected to "penal" (in the Reserve Bank of India's words) consequences.
Therefore, if the bank has conducted a forensic investigation into alleged diversion and siphoning off of funds, and specific roles played by specific individuals is brought out in the investigation, and such a probe would point to plausible interpretation that certain individuals did not play any role in the diversion and siphoning, the material underlying such plausible inference would undermine the allegations. Therefore, fair and transparent symmetrical access to This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/07/2025 at 21:29:40 information, as stipulated by the hon'ble Supreme Court in Takano would mean providing access to not only incriminating material but also exculpatory material, since all such information would be relevant for arriving at the truth. Therefore, access to the record is a vital element of complying with principles of natural justice. In the instant case, not only has no material been supplied, but also Union Bank has actually asserted on oath that it was not required to provide any material whatsoever, and that it is for the noticee to prove his innocence."
(emphasis supplied)
13. Mr. J. Sai Deepak has also relied upon the decision of the Coordinate Bench of this Court dated 22.05.2024 passed in W.P.(C) 1730/2024 titled as Shantanu Prakash v. State Bank of India and Ors., wherein this Court relying upon the decision of T. Takano (supra) has observed that it is imperative that the relevant documents that form basis of issuance of show- cause notice, ought to be provided to the concerned party in order to enable such a party to raise its defence effectively. Relevant Para of the said decision reads thus:
"11. In view of the aforesaid, it is imperative that the relevant documents that form the basis of issuance of a SCN, ought to be provided to the concerned party in order to enable such a party to raise its defense effectively. Such fundamental right of a party cannot be taken away by denying a proper opportunity to submit an efficacious reply, which would not be feasible in the absence of requisite documents that form the core foundation of a SCN. This assumes all the more importance, as on the basis of the defense raised by such a party, proceedings thereto, against the said party, may be dropped in appropriate cases."
14. In view of the above, issue notice.
15. Mr. Santosh Kumar Rout, learned Standing Counsel appearing on This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/07/2025 at 21:29:40 behalf of respondent no.1/PNB accepts notice.
16. Upon petitioners taking steps, issue notice to respondent no.2/RBI by all permissible modes.
17. Let counter-affidavit(s) be filed within a period of four weeks from the date of service.
18. Rejoinder thereto, if any, be filed within two weeks thereafter.
19. Re-notify on 24.09.2025.
20. In the meanwhile, having regard to the submission of Mr. Deepak, which prima facie appears to have substance, further proceedings arising out of show cause notice dated 19.09.2024 are stayed till the next date of hearing.
VIKAS MAHAJAN, J JULY 17, 2025 aj This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 23/07/2025 at 21:29:40