w w w . L a w y e r S e r v i c e s . i n



Jai Balaji Industries Ltd. & Another v/s Punjab National Bank & Another


Company & Directors' Information:- BANK OF PUNJAB LIMITED [Amalgamated] CIN = L65110CH1994PLC014639

Company & Directors' Information:- JAI BALAJI INDUSTRIES LIMITED [Active] CIN = L27102WB1999PLC089755

Company & Directors' Information:- T T G INDUSTRIES LIMITED [Active] CIN = U27209TN1987PLC014169

Company & Directors' Information:- V I P INDUSTRIES LIMITED [Active] CIN = L25200MH1968PLC013914

Company & Directors' Information:- A L M INDUSTRIES LIMITED [Active] CIN = U14100DL1996PLC129067

Company & Directors' Information:- A L M INDUSTRIES LIMITED [Active] CIN = U19111DL1996PLC129067

Company & Directors' Information:- A L M INDUSTRIES LIMITED [Active] CIN = U74110DL1996PLC129067

Company & Directors' Information:- S R K INDUSTRIES LIMITED [Active] CIN = L17121MH1991PLC257750

Company & Directors' Information:- S R INDUSTRIES LTD [Active] CIN = L29246PB1989PLC009531

Company & Directors' Information:- F E INDUSTRIES PRIVATE LIMITED [Active] CIN = U36100PB2003PTC026482

Company & Directors' Information:- N K INDUSTRIES LIMITED [Active] CIN = L91110GJ1987PLC009905

Company & Directors' Information:- K L R INDUSTRIES LIMITED [Active] CIN = U28939TG2002PLC038416

Company & Directors' Information:- T S I INDUSTRIES PRIVATE LIMITED [Under Process of Striking Off] CIN = U18101HR1997PTC034478

Company & Directors' Information:- B L A INDUSTRIES PRIVATE LIMITED. [Active] CIN = U10200MH1964PTC162314

Company & Directors' Information:- BALAJI CORPORATION PRIVATE LIMITED [Active] CIN = U45400MH2008PTC178324

Company & Directors' Information:- R B T INDUSTRIES LIMITED [Active] CIN = U24118UP1990PLC011820

Company & Directors' Information:- H G I INDUSTRIES LIMITED [Active] CIN = L40200WB1944PLC011754

Company & Directors' Information:- R P INDUSTRIES PRIVATE LIMITED [Active] CIN = U27100GJ2011PTC075812

Company & Directors' Information:- BALAJI INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U27106AP1996PTC023333

Company & Directors' Information:- D D INDUSTRIES LIMITED [Active] CIN = U74899DL1974PLC007169

Company & Directors' Information:- A G INDUSTRIES PVT LTD [Active] CIN = U27300HR1991PTC031378

Company & Directors' Information:- H. J. INDUSTRIES (INDIA) PRIVATE LIMITED [Active] CIN = U17120GJ2010PTC060769

Company & Directors' Information:- U F M INDUSTRIES LIMITED [Active] CIN = L15311AS1986PLC002539

Company & Directors' Information:- G R S INDUSTRIES LIMITED [Active] CIN = U00000PB2005PLC029159

Company & Directors' Information:- T S L INDUSTRIES LIMITED [Active] CIN = L65999WB1994PLC065255

Company & Directors' Information:- M F B INDUSTRIES LIMITED [Active] CIN = U31401TN1989PLC018274

Company & Directors' Information:- A C M E INDUSTRIES LIMITED [Dormant under section 455] CIN = U19119DL1992PLC048914

Company & Directors' Information:- V S P INDUSTRIES PRIVATE LIMITED [Active] CIN = U17111TZ2005PTC011820

Company & Directors' Information:- M N INDUSTRIES PRIVATE LIMITED [Active] CIN = U24100TG2012PTC079737

Company & Directors' Information:- G I INDUSTRIES PRIVATE LIMITED [Active] CIN = U15312PB2010PTC033806

Company & Directors' Information:- E T C INDUSTRIES LIMITED [Active] CIN = U31200MP1995PLC009281

Company & Directors' Information:- S K INDUSTRIES PVT LTD [Active] CIN = U74899DL1991PTC045572

Company & Directors' Information:- E A P INDUSTRIES LTD [Active] CIN = U25206WB1956PLC023072

Company & Directors' Information:- S R V E INDUSTRIES LIMITED [Active] CIN = U03210TZ2006PLC012577

Company & Directors' Information:- Z H INDUSTRIES PRIVATE LIMITED [Active] CIN = U45200DL2014PTC265453

Company & Directors' Information:- P AND P INDUSTRIES LIMITED [Strike Off] CIN = U21010MH1992PLC068885

Company & Directors' Information:- N G INDUSTRIES LTD [Active] CIN = L74140WB1994PLC065937

Company & Directors' Information:- S L INDUSTRIES P. LTD. [Active] CIN = U15331WB1989PTC047543

Company & Directors' Information:- AMP INDUSTRIES LIMITED [Active] CIN = L51909AS1985PLC002332

Company & Directors' Information:- T R A T INDUSTRIES LIMITED [Active] CIN = U25199KL1996PLC010148

Company & Directors' Information:- B R INDUSTRIES LIMITED [Active] CIN = U74899DL1995PLC067120

Company & Directors' Information:- H. V. R. INDUSTRIES PRIVATE LIMITED [Active] CIN = U27100DL2010PTC200428

Company & Directors' Information:- N M INDUSTRIES PRIVATE LIMITED [Active] CIN = U74120DL2008PTC175664

Company & Directors' Information:- N R C INDUSTRIES LIMITED [Active] CIN = U51909PB1985PLC006558

Company & Directors' Information:- S N L INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U17115RJ1994PTC008053

Company & Directors' Information:- J V INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1994PTC057081

Company & Directors' Information:- A R INDUSTRIES PVT LTD [Active] CIN = U27101HR1995PTC032569

Company & Directors' Information:- D V S INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1992PTC049221

Company & Directors' Information:- G V G INDUSTRIES PRIVATE LIMITED [Active] CIN = U17111TZ1980PTC006887

Company & Directors' Information:- C D INDUSTRIES LIMITED [Active] CIN = U27100MH1996PLC101277

Company & Directors' Information:- G V INDUSTRIES INDIA PRIVATE LIMITED [Active] CIN = U74900TG2014PTC096387

Company & Directors' Information:- G S M INDUSTRIES PRIVATE LIMITED [Active] CIN = U02001DL2002PTC117443

Company & Directors' Information:- B G INDUSTRIES LTD [Active] CIN = U26921ML1980PLC001830

Company & Directors' Information:- P K INDUSTRIES PRIVATE LIMITED [Active] CIN = U51900DL2012PTC241654

Company & Directors' Information:- M D INDUSTRIES PRIVATE LIMITED [Active] CIN = U91110GJ1994PTC022025

Company & Directors' Information:- L C INDUSTRIES PRIVATE LIMITED [Active] CIN = U15122UP2013PTC055697

Company & Directors' Information:- R M G INDUSTRIES PRIVATE LIMITED [Active] CIN = U18100TG1993PTC016220

Company & Directors' Information:- G. A. INDUSTRIES PRIVATE LIMITED [Active] CIN = U15435MH2005PTC151817

Company & Directors' Information:- I W D W INDUSTRIES LTD. [Strike Off] CIN = U30099WB1990PLC050177

Company & Directors' Information:- P A S INDUSTRIES INDIA PRIVATE LIMITED [Active in Progress] CIN = U17121TZ2005PTC012171

Company & Directors' Information:- V AND S INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1990PTC039251

Company & Directors' Information:- M K J INDUSTRIES PRIVATE LIMITED [Active] CIN = U19111UP1989PTC010468

Company & Directors' Information:- S S F INDUSTRIES LIMITED [Active] CIN = U25190BR1988PLC003160

Company & Directors' Information:- P B INDUSTRIES PRIVATE LIMITED [Active] CIN = U29120MP1994PTC008840

Company & Directors' Information:- R & M INDUSTRIES PRIVATE LIMITED [Active] CIN = U24297TN1972PTC006185

Company & Directors' Information:- A M INDUSTRIES LTD [Active] CIN = U21012WB1977PLC030854

Company & Directors' Information:- A AND S INDUSTRIES PRIVATE LIMITED [Active] CIN = U17117DL1995PTC064137

Company & Directors' Information:- M C INDUSTRIES LTD [Active] CIN = U27106WB1993PLC058995

Company & Directors' Information:- D R INDUSTRIES PRIVATE LIMITED [Active] CIN = U24100WB2011PTC160058

Company & Directors' Information:- R. L. F. INDUSTRIES LIMITED [Active] CIN = U51909DL1983PLC015262

Company & Directors' Information:- U K INDUSTRIES PRIVATE LIMITED [Active] CIN = U24241WB1988PTC044355

Company & Directors' Information:- M G I INDUSTRIES PVT LTD [Active] CIN = U27310GJ2006PTC048707

Company & Directors' Information:- A D INDUSTRIES PRIVATE LIMITED [Active] CIN = U18101WB2008PTC131561

Company & Directors' Information:- V J INDUSTRIES PRIVATE LIMITED [Active] CIN = U29253KA2009PTC050226

Company & Directors' Information:- V T INDUSTRIES PVT LIMITED [Active] CIN = U29150WB1985PLC039217

Company & Directors' Information:- V T INDUSTRIES PVT LIMITED [Active] CIN = U29150WB1985PTC039217

Company & Directors' Information:- G R INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U34300PB1996PTC018671

Company & Directors' Information:- M. K. INDUSTRIES PRIVATE LIMITED [Active] CIN = U15549WB2008PTC130116

Company & Directors' Information:- R S V INDUSTRIES PRIVATE LIMITED [Active] CIN = U52399MH2008PTC180489

Company & Directors' Information:- K. A. INDUSTRIES PRIVATE LIMITED [Active] CIN = U14220JH2008PTC013409

Company & Directors' Information:- D K INDUSTRIES LIMITED [Active] CIN = U45202CH1994PLC014627

Company & Directors' Information:- R K S INDUSTRIES PRIVATE LIMITED [Active] CIN = U20211WB1997PTC086009

Company & Directors' Information:- D G INDUSTRIES PVT LTD [Active] CIN = U36942WB1946PTC013526

Company & Directors' Information:- R I L INDUSTRIES PRIVATE LIMITED [Active] CIN = U70101DL1993PTC052678

Company & Directors' Information:- I S INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U29100GJ2009PTC057308

Company & Directors' Information:- B M INDUSTRIES PRIVATE LIMITED [Active] CIN = U17000MH1997PTC109621

Company & Directors' Information:- H M B INDUSTRIES PVT LTD [Active] CIN = U24297GJ1996PTC070418

Company & Directors' Information:- A G B INDUSTRIES INDIA PRIVATE LIMITED [Strike Off] CIN = U21012TZ2008PTC014753

Company & Directors' Information:- K B R INDUSTRIES PRIVATE LIMITED [Active] CIN = U27107DL1996PTC079915

Company & Directors' Information:- R V S INDUSTRIES PRIVATE LIMITED [Active] CIN = U17111TZ1995PTC006398

Company & Directors' Information:- B N INDUSTRIES PRIVATE LIMITED [Active] CIN = U67120AS1994PTC004273

Company & Directors' Information:- A J INDUSTRIES PRIVATE LIMITED [Active] CIN = U17120MH2004PTC145040

Company & Directors' Information:- S. A. A INDUSTRIES PRIVATE LIMITED [Active] CIN = U01549TZ1997PTC007927

Company & Directors' Information:- K K S K INDUSTRIES PRIVATE LIMITED [Active] CIN = U19201TZ1997PTC007687

Company & Directors' Information:- C R I INDUSTRIES PRIVATE LIMITED [Amalgamated] CIN = U29120TZ2002PTC010129

Company & Directors' Information:- A C T INDUSTRIES PRIVATE LIMITED [Active] CIN = U74899DL1984PTC018724

Company & Directors' Information:- G B INDUSTRIES PRIVATE LIMITED [Active] CIN = U29220PN2011PTC139883

Company & Directors' Information:- S D B INDUSTRIES LIMITED [Active] CIN = U27107MP1996PLC010394

Company & Directors' Information:- M M INDUSTRIES PRIVATE LIMITED [Active] CIN = U31300CT2008PTC020916

Company & Directors' Information:- A C INDUSTRIES PVT LTD [Active] CIN = U29299WB2006PTC109474

Company & Directors' Information:- K M INDUSTRIES PRIVATE LIMITED [Converted to LLP and Dissolved] CIN = U74899DL1991PTC043295

Company & Directors' Information:- C J INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U25209MH1998PTC116707

Company & Directors' Information:- N P INDUSTRIES LTD [Strike Off] CIN = U15549PB1989PLC009426

Company & Directors' Information:- J. L. INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U29141MP2008PTC020731

Company & Directors' Information:- I K INDUSTRIES PRIVATE LIMITED [Active] CIN = U24100MH2010PTC199474

Company & Directors' Information:- H. D. INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U27310MH2011PTC216080

Company & Directors' Information:- R. D. G. INDUSTRIES PRIVATE LIMITED [Active] CIN = U26960DL2008PTC182480

Company & Directors' Information:- R B INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U28999DL2008PTC177248

Company & Directors' Information:- H & H INDUSTRIES PRIVATE LIMITED [Active] CIN = U34100DL2010PTC204604

Company & Directors' Information:- M J INDUSTRIES PRIVATE LIMITED [Active] CIN = U15203KA2011PTC060675

Company & Directors' Information:- B R V INDUSTRIES PRIVATE LIMITED [Active] CIN = U32301UP1995PTC018704

Company & Directors' Information:- A. G. INDUSTRIES LIMITED [Strike Off] CIN = U25201UP1994PLC017291

Company & Directors' Information:- B R INDUSTRIES LIMITED [Strike Off] CIN = U15204AS1993PLC003930

Company & Directors' Information:- I P M INDUSTRIES LIMITED [Active] CIN = U25200DL1995PLC068554

Company & Directors' Information:- M R INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74900UP2008PTC036443

Company & Directors' Information:- R D I INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74900DL1995PTC065508

Company & Directors' Information:- J G INDUSTRIES LTD [Active] CIN = L15141WB1983PLC035931

Company & Directors' Information:- V G INDUSTRIES PRIVATE LIMITED [Active] CIN = U15139JK2015PTC004570

Company & Directors' Information:- S N INDUSTRIES PRIVATE LIMITED [Active] CIN = U29211UP1951PTC002319

Company & Directors' Information:- K G INDUSTRIES PVT LTD [Active] CIN = U29130WB1951PTC019868

Company & Directors' Information:- N S INDUSTRIES PRIVATE LIMITED [Under Process of Striking Off] CIN = U74120UP2012PTC053986

Company & Directors' Information:- W W I INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U29300MH1997PTC112589

Company & Directors' Information:- D U INDUSTRIES PRIVATE LIMITED [Active] CIN = U29230GJ2016PTC091588

Company & Directors' Information:- B V R INDUSTRIES PRIVATE LIMITED [Active] CIN = U28999CT2020PTC010570

Company & Directors' Information:- S R P INDUSTRIES LIMITED [Amalgamated] CIN = U00061BR1984PLC002023

Company & Directors' Information:- C P INDUSTRIES PVT LTD [Strike Off] CIN = U29303MP1949PTC000846

Company & Directors' Information:- J B INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74999MH2013PTC245506

Company & Directors' Information:- S J V INDUSTRIES LTD [Amalgamated] CIN = U15421WB1982PLC035521

Company & Directors' Information:- V V INDUSTRIES PVT LTD [Strike Off] CIN = U99999DL1980PTC010427

Company & Directors' Information:- K K INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U65100DL1982PTC013046

Company & Directors' Information:- A T C INDUSTRIES LTD [Strike Off] CIN = U27109AS1984PLC002201

Company & Directors' Information:- N V INDUSTRIES PVT LTD [Active] CIN = U51909WB1953PTC020952

Company & Directors' Information:- A TO Z INDUSTRIES PVT LTD [Strike Off] CIN = U31908AS1987PTC002804

Company & Directors' Information:- L K INDUSTRIES PRIVATE LIMITED [Active] CIN = U17291MH2012PTC233546

Company & Directors' Information:- G S C INDUSTRIES PRIVATE LTD [Active] CIN = U92114DL1956PTC002616

Company & Directors' Information:- G G INDUSTRIES PRIVATE LIMITED [Active] CIN = U27320UP1969PTC003282

Company & Directors' Information:- K S INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U31909MH1960PTC011707

Company & Directors' Information:- N G C M (INDUSTRIES) LTD [Dissolved] CIN = U19209WB1979PLC032019

Company & Directors' Information:- P R INDUSTRIES PVT LTD [Active] CIN = U21014DL1971PTC005738

Company & Directors' Information:- R K I INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U29190DL2012PTC233413

Company & Directors' Information:- R K INDUSTRIES PVT LTD [Strike Off] CIN = U25202AS1988PTC003132

Company & Directors' Information:- BALAJI INDUSTRIES PRIVATE LIMITED [Not available for efiling] CIN = U99999TN1986PTC012919

Company & Directors' Information:- S G R INDUSTRIES PVT LTD [Strike Off] CIN = U25199WB1948PTC016397

Company & Directors' Information:- B M K INDUSTRIES PRIVATE LIMITED [Active] CIN = U17100MH1948PTC006398

Company & Directors' Information:- K R INDUSTRIES INDIA PRIVATE LIMITED [Active] CIN = U25190KA2012PTC062367

Company & Directors' Information:- Y K INDUSTRIES PRIVATE LIMITED [Active] CIN = U19115UP2012PTC051151

Company & Directors' Information:- E S INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74999TN2012PTC086119

Company & Directors' Information:- I B INDUSTRIES LTD. [Strike Off] CIN = U28992WB1990PLC050469

Company & Directors' Information:- V I INDUSTRIES LTD [Strike Off] CIN = U36934WB1951PLC019890

Company & Directors' Information:- J M INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U05002UP1952PTC002456

Company & Directors' Information:- L F INDUSTRIES PRIVATE LIMITED [Active] CIN = U17291UP2015PTC068602

Company & Directors' Information:- A K S INDUSTRIES PVT LTD [Active] CIN = U27201WB1946PTC013433

Company & Directors' Information:- V M V INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U26990GJ2013PTC076945

Company & Directors' Information:- S K INDUSTRIES LIMITED [Under Process of Striking Off] CIN = U29248PN1948PLC001948

Company & Directors' Information:- S P INDUSTRIES PVT LTD [Strike Off] CIN = U20232AS1980PTC001853

Company & Directors' Information:- V N R INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U21090AP2012PTC081525

Company & Directors' Information:- A K INDUSTRIES PVT LTD [Active] CIN = U51109WB1944PTC011764

Company & Directors' Information:- K INDUSTRIES PVT LTD [Strike Off] CIN = U99999KA1946PTC000938

Company & Directors' Information:- G I P INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U52605MH2015PTC263962

Company & Directors' Information:- C. L. INDUSTRIES PRIVATE LIMITED [Active] CIN = U27109RJ2014PTC045306

Company & Directors' Information:- R. A. M INDUSTRIES PRIVATE LIMITED [Active] CIN = U17120MH2014PTC254820

Company & Directors' Information:- BALAJI PRIVATE LIMITED [Active] CIN = U25190MH2011PTC225580

Company & Directors' Information:- S. B. INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U74900PN2012PTC144181

Company & Directors' Information:- A & P INDUSTRIES PRIVATE LIMITED [Active] CIN = U36935TG2014PTC095781

Company & Directors' Information:- C & N INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U40200TG2014PTC095187

Company & Directors' Information:- B S B INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U45200TG2013PTC088059

Company & Directors' Information:- R A R INDUSTRIES PRIVATE LIMITED [Active] CIN = U74900TG2016PTC103684

Company & Directors' Information:- K S A B INDUSTRIES PRIVATE LIMITED [Active] CIN = U51909WB2012PTC181903

Company & Directors' Information:- S V S INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U36100JK2013PTC003808

Company & Directors' Information:- R D M INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U31100DL2013PTC252294

Company & Directors' Information:- INDUSTRIES INDIA PRIVATE LIMITED [Strike Off] CIN = U00349KA1947PTC000501

Company & Directors' Information:- A V K INDUSTRIES INDIA PRIVATE LIMITED [Strike Off] CIN = U52100KA2012PTC066761

Company & Directors' Information:- U K J INDUSTRIES PRIVATE LIMITED [Active] CIN = U21094DL2020PTC370720

Company & Directors' Information:- S V INDUSTRIES PVT LTD [Strike Off] CIN = U27104WB1960PTC024715

Company & Directors' Information:- J INDUSTRIES PVT LTD [Strike Off] CIN = U18101OR1960PTC000388

Company & Directors' Information:- B P K INDUSTRIES PRIVATE LIMITED [Strike Off] CIN = U99999MH1960PTC011841

Company & Directors' Information:- T & M INDUSTRIES LIMITED [Liquidated] CIN = U99999TN1956PLC002904

Company & Directors' Information:- INDUSTRIES (INDIA) PRIVATE LIMITED [Under Process of Striking Off] CIN = U51109BR1946PTC000228

Company & Directors' Information:- M A INDUSTRIES PVT LTD [Strike Off] CIN = U15412WB1950PTC019030

Company & Directors' Information:- INDUSTRIES INDIA PRIVATE LIMITED [Under Process of Striking Off] CIN = U60200BR1946PTC000035

Company & Directors' Information:- NATIONAL INDUSTRIES LIMITED [Dissolved] CIN = U99999MH1943PLC007506

Company & Directors' Information:- K INDUSTRIES LIMITED [Not available for efiling] CIN = U99999MH1946PTC005438

Company & Directors' Information:- B M K INDUSTRIES PVT LTD [Active] CIN = U99999MH1948PTC006393

Company & Directors' Information:- S K INDUSTRIES PVT LTD [Under Process of Striking Off] CIN = U99999MH1948PTC006932

Company & Directors' Information:- NATIONAL INDUSTRIES LTD. [Dissolved] CIN = U99999MH1949PLC007203

Company & Directors' Information:- S K INDUSTRIES PVT LTD [Active] CIN = U15142PN1948PTC006932

    W.P. No. 12 of 2020

    Decided On, 03 February 2020

    At, High Court of Judicature at Calcutta

    By, THE HONOURABLE MR. JUSTICE SABYASACHI BHATTACHARYYA

    For the Petitioners: Abhrajit Mitra, Rajarshi Kajaria, Advocates. For the Respondents: Joydip Banerjee, Abhishek Banerjee, Parna Roy Chowdhury, Shatanik Ghosh, Advocates.



Judgment Text


The Court:

1. The present challenge has been preferred primarily against a notice dated December 16, 2019 issued by the respondent no.1-bank to the petitioner no.1 and others.

2. The subject of the said notice reads as follows:

Identification of default in the loan account of M/s Jai Balaji Industries Ltd. with the bank, as "willful defaulter". The notice proceeded to mention certain defaults having been committed by the petitioner no.1 and that siphoning off funds was also indicated from the conduct of the petitioner no.1.

3. The crucial paragraph, at page - 26 of the instant writ petition, stated as follows:

"If the default(s) is/are not rectified within 10 days from the receipt of this notice, bank intends to disclose or publish your name or the name/s of your company/ firm/ unit and your Director/s/Partner/s/Proprietor as willful defaulter in such manner and though such medium as the bank or RBI in their absolute discretion may think fit. This will eventually result in:

* Non Sanction of additional facility by any Bank/FI.

* Debarring the entrepreneurs/promoters from institutional fianc from SCBs, DFIs, Govt. owned NBFCs, Investment Institutions etc. for floating new ventures.

* Beside legal process, and foreclosure of recovery of dues, if warranted, criminal proceedings may be initiated.

We, therefore, advise you to rectify default in time and will thereby preclude the contingency for declaring you as a willful defaulter.

Besides above, the bank will take appropriate legal actions for recovery of bank dues without any further reference at your risk, responsibility and costs."

4. Learned senior counsel for the petitioners argues that, as per the Master Circular on Willful Defaulters dated July 1, 2015, issued by the Reserve Bank of India (RBI), the Chief Manager of the respondent no.1-bank did not have the authority to issue such notice. In this context, learned senior counsel relies on Clause 3, sub-clauses (a), (b) and (c) of the said Master Circular, which are as follows: "3. Mechanism for identification of Willful Defaulters The mechanism referred to in paragraph 2.5 above should generally include the following:

(a) The evidence of willful default on the part of the borrowing company and its promoter / whole-time director at the relevant time should be examined by a Committee headed by an Executive Director or equivalent and consisting of two other senior officers of the rank of GM / DGM.

(b) If the Committee concludes that an event of willful default has occurred, it shall issue a Show Cause Notice to the concerned borrower and the promoter/whole-time director and call for their submissions and after considering their submissions issue an order recording the fact of willful default and the reasons for the same. An opportunity should be given to the borrower and the promoter/whole-time director for a personal hearing if the Committee feels such an opportunity is necessary.

(c) The Order of the Committee should be reviewed by another Committee headed by the Chairman/Chairman & Managing Director or the Managing Director & Chief Executive Officer / CEOs and consisting, in addition, to two independent directors/non-executive directors of the bank and the Order shall become final only after it is confirmed by the said Review Committee. However, if the Identification Committee does not pass an Order declaring a borrower as a willful defaulter, then the Review Committee need not be set up to review such decisions."

5. It is argued that a Show Cause Notice, if at all, could be issued by the committee envisaged in Clause 3, headed by an Executive Director or equivalent and consisting of two other Senior Officers of the rank of GM/DGM.

6. In the present case, the Chief Manager of the concerned branch of the bank issued the notice, without having any authority under the law to do so.

7. It is argued that if the notice, particularly the last paragraph thereof, is taken in its proper context, a warning was issued to the petitioner no. 1 to rectify alleged defaults within ten (10) days from the receipt of the notice. Consequences of non-rectification, as contemplated in the notice, would entail the bank intending to disclose or publish the name of the petitioner no.1 and its Director/Partner/Proprietor as willful defaulter in such manner and through such medium as the bank or RBI, in their absolute discretion, might think fit.

8. The consequences thereof were also mentioned in the notice, inter alia, threatening non-sanction of additional facility by any bank/financial institution, debarring entrepreneurs/promoters from institutional finance, legal process, etc.

9. By relying on an unreported judgment dated January 9, 2020 passed by this court in W.P. No. 603/2019 [Murlidhar Ratanlal Exports Ltd. & Anr. vs. Punjab National Bank & Anr.], learned senior counsel argues that the authority issuing the notice in the said case, being a 'Centralized Loan Processing Centre' of the respondent no. 1, had no power to do so and only the Committee, as contemplated in the Master Circular, had such authority.

10. Learned counsel for the respondents argues that the impugned notice was merely a caution given by the bank to its customers, that is, the writ petitioner, for rectifying its defaults and was not, by itself, a declaration that the petitioner no.1 was a willful defaulter. It is argued that the said notice was rather an opportunity given to the petitioner no.1 to avoid being declared as a willful defaulter and was for the benefit of the petitioners themselves, rather than being a penal action against the petitioners. In this context, learned counsel for the respondents cites Clause 5.1 of Recovery Division Circular No.22/2015 dated August 31, 2015, issued by the Recovery Division of the respondent no.1 - bank regarding 'Willful Defaulters and Action There against'.

11. The said clause is reproduced below:

"5.1 A. When Borrower is to be declared as Willful Defaulter Preliminary Notice to Rectify Default Immediately on classification of an account as NPA and subsequent identification of the specific events/transactions perceived to have constituted as "Willful Default", as a measure of natural justice, Branches are advised to call upon the borrower(s) including the identified persons as per draft letter Annexure-I by registered post with AD as well as E-mail, if available, giving them 10 days time to rectify the default, indicating that the Bank intends to classify them as willful defaulter. Notice be sent to each identified persons, specifying each events of default on his part. For e.g: They have the capacity to pay, but not paying, there is diversion/siphoning of funds, sale of charged assets without depositing proceeds in the account.

B. When Guarantors (Individuals or Non-group Corporates or Group Corporates) are to be declared as willful defaulters:

Serve Recall/Demand notice on the guarantor as per the format devised by the bank."

12. It is submitted that the said Circular was in consonance with the RBI Guidelines and was issued subsequent to the Master Circular dated July 1, 2015. As such, it is argued that the bank was well within its jurisdiction to issue the said notice, pursuant to the said Circular.

13. The third argument advanced by the respondents is that the petitioners have not come with clean hands, since a huge amount is due from the petitioners, the repayment of which has deliberately been withheld by the petitioners. As such, it is submitted, that writ court ought not to grant a relief to such litigants.

14. A perusal of the relevant clause of the Master Circular dated July 1, 2015, issued by the RBI and, as such, binding on all banks, particularly Nationalized Banks of India, including respondent no.1 - bank, that is, clause 3, makes it abundantly clear that the Committee contemplated therein has to issue the Show Cause Notice to the concerned borrower and call for their submissions and, after considering their submissions, issue an order recording the fact of willful default and the reasons for the same. Clause 3(b) further provides that an opportunity should be given to the borrower and the promoters/whole-time Director for a personal hearing, if the Committee feels such an opportunity is necessary.

15. Sub-clause (c) of Clause 3 provides for a further review of the order of the Committee, which issued the Show Cause Notice, by another Committee headed by the Chairman/Chairman and Managing Director or the Managing Director and Chief Executive Officer/CEOs and consisting, in addition, of two independent Directors/Non-Executive Directors of the bank and that the order shall become final only after it is confirmed by the said Review Committee. The Review Committee, as per sub-clause (c), need not even be set up in the event the Identification Committee does not pass an order declaring a borrower as a willful defaulter.

16. Sub-clause (a) of clause 3 categorically provides that the evidence of willful default should be examined by a Committee headed by an Executive Director or equivalent and consisting of two other Senior Officers of the rank of GM/DGM, which Committee itself will issue the Show Cause Notice as contemplated in sub-clause (b).

17. In the present case, it is evident that no such Committee was formed at all, either for taking evidence of willful default and issuing Show Cause Notice, or for review, if such an order is passed.

18. The purport of the impugned notice is unambiguous as to the consequence thereof. If the notice stopped at asking the alleged defaults to be rectified and indicated that, in the event of non-rectification, the bank would take steps in consonance with clause 3 of the Master Circular of the RBI dated July 1, 2015, there could not have been much grievance on the part of the petitioners. Unfortunately, the impugned notice did not stop at that but threatened in unambiguous terms, that after the expiry of ten days, in the event the perceived defaults were not rectified, the bank intended to unilaterally disclose or publish the name of the borrower as willful defaulter in such manner and through such medium as the bank or the RBI, in their absolute discretion, may think fit.

19. Learned counsel for the respondents tries to juggle with the expression "intends" to argue that the notice was merely a prior warning and the word "intends" itself indicates that it was not necessary that the bank would actually disclose the names of the borrowers as being willful defaulters.

20. However, such an interpretation is absurd, since there was no protective screen between the proposed intention of the bank and its actual implementation by disclosure or publication of the name of the borrower as willful defaulter. The term "intends" automatically connotes an implicit threat of carrying out such intent at the arbitrary and unilateral whims of the bank. In a hypothetical situation, where the ten days had elapsed and, in the perception of the bank alone, the alleged defaults were not rectified, there was nothing to restrain the bank from disclosing or publishing the name of the borrower as willful defaulter, by carrying out such intent to its logical conclusion. Hence, the notice tantamount to declaration of the borrower as willful defaulter, with only a pause of ten days in the meantime from the receipt of such notice, without even permitting the borrower to show any cause or be heard on such declaration. The declaration or publication as willful defaulter was an automatic corollary of the notice after ten days from receipt and sought to usurp the power restricted to the Committee envisaged in Clause 3(a) of the Master Circular of the RBI, followed by a review by another Committee, as contemplated in Clause 3(b) of the same .

21. The other linguistic jargon sought to be interpreted on behalf of the respondents was the expression in the incriminating clause of the impugned notice, immediately following the expression "as wilful defaulter", being as follows:

"In such manner and though such medium as the bank or RBI in their absolute discretion may think fit".

22. Learned counsel for the respondents seeks to impress upon the court that such expression meant that whatever action would be taken would be in the discretion of the RBI and as such, would comply with the Master Circular of the RBI.

23. However, the same logic is equally absurd as the previous one, since it was nowhere mentioned in the impugned notice that the Master Circular would be followed. On the contrary, the expression relied on by the respondents merely pertained to the manner and medium through which the disclosure or publication of the name of the borrower as wilful defaulter would be made. The said expression did not have anything to do with an adjudication of willful defaulter as per the Master Circular of the RBI but only related to the mode of publication.

24. Moreover, even if the said expression related to the mode to be followed in declaration of the borrower as wilful defaulter, which is actually not the case, it would also be contrary to the RBI Master Circular, since the expression-in-question leaves it on the absolute and arbitrary discretion of not only the RBI but the bank itself for the decision to be taken, without following due process as contemplated in Clause 3 of the Master Circular. This modus operandi patently militates against the underlying principle of Clause 3 of the Master Circular and is de hors the same.

25. The purported Recovery Division Circular No. 22/2015 dated August 31, 2015, issued by the Recovery Division of the respondent no.1-bank itself, at least so far as it relates to Clause 5.1 therein, which has been quoted above, is de hors the Master Circular itself and should be struck down on such ground alone.

26. However, the notice impugned in the present writ petition went one step beyond Clause 5.1 of the Recovery Division Circular, insofar as the said Circular stopped at giving the alleged defaulter ten days' time to rectify the default and to indicate that the bank intends to classify it as wilful defaulter, whereas the respondent no.1, in the impugned notice, was over-zealous in not only stopping at communicating such intention but also threatened to disclose or publish the name of the borrower as wilful defaulter and also warned the borrower of the implications thereof.

27. This was not only uncalled-for and unwarranted, but also went beyond Clause 5.1 of the Recovery Division Circular itself.

28. However, a closer scrutiny of Clause 5.1 reveals that it was not squarely contrary to the Master Circular of the RBI, since the clause-in-question provided that only on classification of an account as NPA and subsequent identification of the specific events/transactions "perceived to have constituted" as wilful default, the branches were advised to call upon the borrowers, giving them ten days' time to rectify the default. The following consequence was that the bank would intend to classify them as wilful defaulters

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, which leaves the leeway for the Master Circular to be followed subsequently by the formation of an Identification Committee as contemplated in Clause 3(a) and the subsequent steps being taken in terms of the RBI Master Circular. As such, this court stops short of striking down Clause 5.1 of the Recovery Division Circular No.22/2015 dated August 31, 2015 of the respondent no.1-bank. 29. Yet, the notice impugned in the present writ petition was categorically contrary to not only the Master Circular dated July 1, 2015 of the RBI but even beyond the contemplation of the Recovery Division Circular dated August 31, 2015, as encapsulated in Clause 5.1 thereof. 30. Hence, the impugned notice dated December 16, 2019 was de hors the law and against the principles of natural justice, particularly the doctrine of audi alteram partem. As such, the said notice, not being tenable in the eye of law, is required to be set aside. 31. Accordingly, W.P. No. 12 of 2020 is allowed on contest, thereby quashing the notice dated December 16, 2019 issued by the respondent no.1-bank to the petitioners, which notice is annexed at page 23 of the instant writ petition, as annexure P-1. 32. It is made clear that this order will not preclude the respondents from proceeding in accordance with law, in the event the respondents find it necessary, to identify the petitioners as wilful defaulters in consonance with Clause 3 of the Master Circular of the RBI dated July 1, 2015. 33. There will be no order as to costs. 34. Urgent certified website copies of this order, if applied for, be made available to the parties upon compliance with the requisite formalities.
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