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Showing contexts for: forensic audit report in Ratul Puri vs Bank Of Baroda on 29 February, 2024Matching Fragments
vii. The validity of Master Circular is not under challenge by the petitioner;
viii. The Review Committee has passed well-reasoned order, which is based on the Forensic Audit Report and which had found diversion of funds. The Forensic Audit Report has not been challenged. This Court cannot sit in judgment over the Forensic Audit Report, which is prepared by an independent third party. The said Review Committee order does not warrant any interference from this Court;
Contents and effect of Forensic Audit Report
144. This brings this Court to consider the effect of the Forensic Audit Report dated 3.6.2019. As recorded above, this Court, vide order dated 28.11.2023 had directed the parties to place on record the document which showed the satisfaction arrived at by the respondent-Bank to issue show cause notice to the petitioner. The petitioner, on 16.12.2023, placed on record a compilation annexing Minutes of Meeting dated 24.2.2020, wherein, the decision to issue show cause notice to the petitioner was taken. In the said Minutes, it is recorded that the decision to issue show cause notice is taken on the basis of the Forensic Audit Report. In the column "Document/ Evidence", which proved the event of wilful default, it is mentioned "Forensic Audit Report of M/s GSA and Associates". Thus, the whole basis for issuance of show cause notice to the petitioner is the Forensic Audit Report dated 3.6.2019.
145. However, the show cause notice issued to the petitioner does not make any reference to the Forensic Audit Report. Admittedly, even the copy of the Forensic Audit Report was supplied by the respondent-Bank to the petitioner, after the issuance of the show cause notice.
146. The petitioner has contended that the respondent-Bank, for the first time, has sought to place reliance on the Forensic Audit Report in the counter affidavit filed before this Court. The respondent-Bank cannot justify its Review Committee order on the basis of pleadings and documents which did not form part of the show cause notice. It is contended that the validity of an order has to be adjudged on the basis of reasons assigned therein and not by subsequent explanations by way of affidavits. In support of the said contention, the petitioner has placed reliance on the decisions of the Hon‟ble Supreme Court in Mohinder Singh Gill v. Chief Election Commissioner46, Rashmi Metaliks Ltd. v. Kolkata Metropolitan Development Authority47, Dipak Babaria v. State of Gujarat48 and State of Punjab v. Bandeep Singh49.
150. Thus, the Forensic Audit Report did not verify the source of funds which were invested in the subsidiaries. The respondent-Bank, could not have issued show cause notice to the petitioner for wilful default, without verifying the source of funds that were invested. Unless the funds that were invested were found to be borrowed funds, the respondent-Bank did not have jurisdiction to invoke the Master Circular. The very genesis of "diversion" or "siphoning of" funds is dependent on the funds being borrowed funds. The reliance placed by the respondent- Bank on the Forensic Audit Report is clearly misconceived. The Forensic Audit Report does not record any conclusion regarding diversion or siphoning of funds qua the petitioner. The reliance placed by the respondent-Bank on the Forensic Audit Report to issue show cause notice of wilful default to the petitioner is clearly misplaced.