Disposed

Ashok Memory (India) Private Limited v. State Bank of India

Madras HC5 Sept 2024WP/178/2024

Case brief

AI extract

What is this about?

The petitioner challenged a show cause notice treating its account as fraud due to a third party's loan default. The court directed the bank to consider objections within four weeks and barred coercive steps pending outcome.

What did the court decide?

Permitted petitioner to object within four weeks; directed bank to consider objections and refrain from coercive steps.

Ashok Memory (India) Private Limited Vs State Bank of… — Banking and Recovery | Madras HC (2024)

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W.P.No.178 of 2024

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 05.09.2024

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CORAM

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THE HONOURABLE MR.JUSTICE M.DHANDAPANI

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W.P.No.178 of 2024 and W.M.P.No.192 of 2024

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Ashok Memory (India) Private Limited, rep.by its Director, Lalji Bharadwaj, New No.9 (Old No.3), 6th Main Street, Gopalapuram, Chennai-600 086.

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... Petitioner

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Vs.

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1.The State Bank of India, rep.by its Assistant General Manager, Fraud Monitoring Cell, State Bank of India, Stressed Assets Resolution Group, Corporate Centre, Mumbai-400 005.

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2.The State Bank of India, Stressed Assets Management Branch-(4105), Red Cross Buildings, No.32, Montieth Road, Egmore, Chennai-600 008.

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Page 1 of 6

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https://www.mhc.tn.gov.in/judis

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W.P.No.178 of 2024

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3.Ashok Magnetics Limited, Rep.by Liquidator, V.Nagarajan, B-73, SIPCOT Industrial Complex, Gummidipoondi-601 201. ... Respondents

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PRAYER : Writ Petition filed under Article 226 of the Constitution of India praying for issuance of a Writ of Certiorari, to call for the records of the respondent and quash the impugned order dated 05.12.2023 in reference No.SARG/FMD/2023-24/SCN/69.

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For Petitioner : Ms.Rita Chandrasekar for Mr.V.P.Mohammed Moin For Respondents : Mr.M.L.Ganesh for R1 and R2 No-appearance for R3

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O R D E R

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This Writ Petition has been filed challenging the show cause

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notice issued by the first respondent dated 05.12.2023.

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The learned counsel appearing for the petitioner submits that

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the petitioner has not borrowed any loan from the first respondent Bank, however, the petitioner was a Corporate Guarantor to the loan availed by the

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Page 2 of 6

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https://www.mhc.tn.gov.in/judis

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W.P.No.178 of 2024

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third respondent and due to non-repayment of loan by the third respondent, the first respondent has issued the impugned show cause notice dated 05.12.2023 to the petitioner to show cause and make submissions in writing within 15 days from the date of receipt of the letter as to why the account of the petitioner should not be categorised and reported as fraud as per RBI Guidelines. Challenging the same, the present Writ Petition has been filed.

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The learned counsel appearing for the petitioner further submits that it would suffice, if this Court permits the petitioner to make an objection before the respondents 1 and 2 within a period of four weeks from the date of receipt of a copy of this order and thereafter, the respondents 1 and 2 may be directed to consider the same and pass appropriate orders. Till such time, this Court may direct the respondents 1 and 2 not to take any coercive steps against the petitioner.

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The learned counsel appearing for the respondents 1 and 2

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submits that the petitioner is a Corporate Guarantor to the loan availed by

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_________ Page 3 of 6

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https://www.mhc.tn.gov.in/judis

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W.P.No.178 of 2024

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the third respondent and the third respondent has not paid the loan amount and thereby, the impugned show cause notice was issued against the petitioner. If at all the petitioner is having any grievance, the petitioner can very well canvass all the points before the Authority.

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Heard the learned counsel appearing for the petitioner and the

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learned counsel appearing for the respondents 1 and 2.

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In view of the limited request sought for by the learned counsel appearing for the petitioner, this Court, without interfering with the impugned show cause notice, permits the petitioner to make an objection before the respondents 1 and 2 within a period of four weeks from the date of receipt of a copy of this order and on receipt of the same, the respondents 1 and 2 are directed to consider the same and pass appropriate orders as expeditiously as possible. Till such time, the respondents 1 and 2 are directed not to take any coercive steps against the petitioner.

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Page 4 of 6

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https://www.mhc.tn.gov.in/judis

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W.P.No.178 of 2024

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Accordingly, this Writ Petition is disposed of. There shall be no

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order as to costs. Connected miscellaneous petition is closed.

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05.09.2024

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NCC: Yes / No Index : Yes / No Speaking Order : Yes / No ssb

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1.The State Bank of India, rep.by its Assistant General Manager, Fraud Monitoring Cell, State Bank of India, Stressed Assets Resolution Group, Corporate Centre, Mumbai-400 005.

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2.The State Bank of India, Stressed Assets Management Branch-(4105), Red Cross Buildings, No.32, Montieth Road, Egmore, Chennai-600 008.

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_________ Page 5 of 6

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https://www.mhc.tn.gov.in/judis

W.P.No.178 of 2024

M.DHANDAPANI, J.

ssb

W.P.No.178 of 2024

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05.09.2024

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_________ Page 6 of 6

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https://www.mhc.tn.gov.in/judis

Ashok Memory (India) Private Limited v. State Bank of India

Case brief

What is this about?

What did the court decide?

Ashok Memory (India) Private Limited v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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