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11. In the above background, the questions that arise for consideration are – (a) Does the decision in Rajesh Agarwal (supra) recognize a right inhering in the account holder/borrower to a personal/oral hearing before the account is declared/classified as “fraud” under the Master Directions of the RBI? (b) Whether the issuance of a show cause notice, the consideration of the reply filed by the borrower and the obligation to pass a reasoned order setting out the relevant facts/circumstances relied upon, the submissions made in response to the show cause notice and the reasons for classification of account as “fraud” would satisfy the principles of natural justice? (c) Whether there is an obligation on the banks to furnish the entire Forensic Audit Report to the borrowers before declaration of the account as “fraud”?’ If not, whether the furnishing of the conclusions of the Forensic Audit Report would serve the ends of justice?

112. The High Court has rightly followed the judgment of Rajesh Agarwal (supra) on this aspect of the matter. The learned Solicitor General of India, Mr. Tushar Mehta, submits that this Court in Rajesh Agarwal (supra) only directed the conclusion of the forensic audit report and not the entire report to be furnished. According to the learned Solicitor General, since the entire audit report would become a subject matter of criminal investigation the forensic audit report cannot be given. According to the Solicitor General the Show Cause Notice outlines the forensic auditor’s conclusion in detail so that the account holder can effectively respond.

c) The procedure set out in Rajesh Agarwal (supra) which has been incorporated in the Master Directions of 2024 strikes a fair balance between promptitude and fairness and duly comports with the principles of natural justice ensuring fairness to the borrower whose account is likely to be classified as a fraud account.

d) Wherever audit reports are available, including forensic audit reports, the same shall be furnished to the borrower and their representation on the report, including on the findings and conclusions be elicited, in case the banks consider the audit report relevant for classifying the account as fraud account. In view of the same, disclosure by furnishing copies of the audit report, including the forensic audit report to the borrower is mandatory. Supply of reports in digital form will be valid compliance;

herein was entitled the copies of the forensic audit reports. Consequently, the Fraud Identification Committee of the appellant-Bank shall furnish the forensic audit reports and after granting an opportunity to the respondent to file its reply proceed in accordance with the Master Directions of the RBI, and pass fresh orders depending on the conclusion they arrive at.

ii) Insofar as Civil Appeal @ Special Leave Petition Diary No. 55628 of 2025 is concerned, the appeal is partly allowed. While the direction of the learned Single Judge as confirmed by the Division Bench in LPA 472 of 2025 dated 29.07.2025 to grant a personal hearing to the respondent is set aside, the directions insofar as they mandate the furnishing of the forensic audit reports are upheld. Consequently, the appellant- Banks shall furnish the forensic audit reports and after  granting an opportunity to file a representation proceed in accordance with the Master Directions of the RBI, and pass fresh orders depending on the conclusion they arrive at.