Zync Global Private Limited v. Punjab National Bank

Delhi HC12 Mar 2025W.P.(C)/13135/2024

Case brief

AI extract

What is this about?

Zync Global Private Limited v. Punjab National Bank; W.P.(C) 13135/2024; Delhi High Court; Justice Manoj Jain; 12 March 2025; fraud classification of loan account; RBI fraud reporting; show cause notice; Annexure-R1 letter dated 16.10.2024; disposal as not pressed; liberty to file fresh writ petition; four-week restraint on precipitative action; delay condonation CM APPL. 15070/2025; counter affidavit taken on record.

What did the court decide?

Petition disposed of as not pressed, without prejudice to the rights and contentions of the parties; liberty granted to file a fresh writ petition challenging the Bank's order dated 16.10.2024 declaring the loan account as 'fraud', with the respondent/Bank restrained from taking any further precipitative step for four weeks from 12.03.2025. ¶¶32

Zync Global Private Limited Vs Punjab National Bank — Delhi HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the decision of the respondent/Punjab National Bank declaring the petitioner's account as 'fraud' should be set aside as illegal, arbitrary and unconstitutional.

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Ratio / Principle

In CM APPL. 15070/2025, the delay of 18 days is condoned and the counter affidavit is taken on record; the application stands disposed of.

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Key takeaways

Given the subsequent development (the 16.10.2024 fraud-classification order coming on record) and without prejudice to the rights and contentions of the parties, the present writ petition is disposed of as not pressed; the issue of the legality of the fraud classification itself was not adjudicated.ratio¶¶30
The petitioner is granted liberty to file a fresh writ petition challenging the Bank's order dated 16.10.2024 classifying its loan account as 'fraud'.ratio¶¶31
In the interregnum, the respondent/Bank shall not take any further precipitative step for a period of four weeks from the date of this order.

Detailed headnote1 paragraphs

High Court of Delhi (Manoj Jain, J.) — W.P.(C) 13135/2024, Zync Global Private Limited v. Punjab National Bank, decided 12.03.2025 (oral): Writ petition challenging the Bank's decision declaring the petitioner's loan account as 'fraud' was filed on an apprehension before any order existed. During pendency, it emerged that the Bank had in fact issued a letter dated 16.10.2024 declaring the loan account as fraud, prompting the Bank's counsel to apologise for an earlier incorrect statement that only a show cause notice had been issued. With consent, and without prejudice to the parties' rights and contentions, the petition was disposed of as not pressed; the petitioner was granted liberty to file a fresh writ petition challenging the order dated 16.10.2024, and the Bank was directed not to take any further precipitative step for four weeks. Delay of 18 days in CM APPL. 15070/2025 was condoned and the counter affidavit taken on record.

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$~49

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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% Date of Decision: 12^th March, 2025

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- W.P.(C) 13135/2024

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ZYNC GLOBAL PRIVATE LIMITED .....Petitioner Through: Ms. Astha Gumber and Mr. Manohar Malik, Advocates (through V.C.)

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versus

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PUNJAB NATIONAL BANK .....Respondent Through: Mr. S.S. Hooda with Mr. Aayushman Aeron, Advocates.

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CORAM:

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HON'BLE MR. JUSTICE MANOJ JAIN J U D G M E N T (oral)

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CM APPL. 15070/2025

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For the reasons stated in the application, the delay, which is stated to be of 18 days, is hereby condoned. The counter affidavit is taken on record.

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The application stands disposed of. W.P.(C) 13135/2024

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However, with the consent of both the sides, the writ petition, as such, has also been taken up for consideration today itself.

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It needs to be highlighted that the present writ petition has been filed with the prayer that the decision of the respondent/Bank, declaring account of petitioner as ‘ fraud’ , be set aside being illegal, arbitrary and unconstitutional.

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The writ petition was filed on 18.09.2024 and it was taken up by this Court for the first time on 19.09.2024. Thereafter, a detailed order was passed by this Court on 27.09.2024, in the presence of learned counsel for respondent/Bank.

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Signature Not Verified

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W.P.(C) 13135/2024

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Digitally Signed By:SONIA THAPLIYAL Signing Da te:1 8.03.2025 11:55:23

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It is important to reiterate that when the writ petition was filed, the petitioner merely apprehended that its account had been classified as ‘ fraud’ and no such order was placed on record.

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When the present matter was taken up by this Court on 12.02.2025, the counsel for respondent/Bank made a statement that only a show cause notice had been issued and no final order had yet been passed against the petitioner. He also submitted that, therefore, he was not aware as to on what basis, the account was shown as ‘ fraud’ on the website of Reserve Bank of India (RBI).

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It was in the abovesaid backdrop that there was a direction to respondent/Bank to file counter affidavit. 7. Coming to such counter affidavit, the respondent/Bank has now annexed one letter dated 16.10.2024, sent to the petitioner Company and its Directors, informing them that the respondent/Bank has decided to declare the loan account as ‘ fraud’ . Such communication and order is annexed as Annexure – R1.

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Learned counsel for respondent submits that on account of some miscommunication, he made a wrong statement before this Court for which he tenders his apology. He submits that the correct facts have now been placed on record and pursuant to the show cause notice in question, the account has already been classified as ‘ fraud’ . 9. Learned counsel for the petitioner submits that the petitioner Company never received the above said letter. 10. Learned counsel for the petitioner submits that though the manner in which the account has been classified as ‘ fraud’ during the pendency of the present writ petition is not in a good taste but she

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Signature Not Verified

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W.P.(C) 13135/2024

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Digitally Signed By:SONIA THAPLIYAL Signing Da te:1 8.03.2025 11:55:23

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submits that since the order is already there and since the abovesaid order was never in their knowledge earlier and was never even communicated to them, the petitioner may be given liberty to file the petition afresh challenging the abovesaid order. She, however, submits that the respondent/Bank may be directed not take any further precipitative step for a period of four weeks from today.

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It is undertaken by learned counsel for the petitioner that within the abovesaid period of four weeks, the petitioner would file fresh petition challenging the abovesaid order dated 16.10.2024 whereby their loan account has been classified as ‘ fraud’ .

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In view of the abovesaid subsequent development and without prejudice to the rights and contentions of the parties, the present petition is disposed of as not pressed.

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Petitioner is also granted liberty to file fresh writ petition challenging the abovesaid order dated 16.10.2024. Simultaneously, in the interregnum, the respondent/Bank shall not take any further precipitative step for a period of four weeks from today.

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