Best and Crompton Engineering Projects Limited Vs… — Writ and Judicial Review | Madras HC (2025)

Best and Crompton Engineering Projects Limited Vs… — Writ and Judicial Review | Madras HC (2025)

What the court decided

AI extract

Outcome

None on the merits; the writ petition was disposed of as no longer maintainable, and the connected Miscellaneous Petition (W.M.P.No.13395 of 2025) was closed with no order as to costs.

Issue for consideration

Whether the undated forensic audit report and the classification of the petitioner company's accounts as fraud by respondent Nos.1 to 3, reported to the Reserve Bank of India, were arbitrary, malicious and unreasonable and liable to be quashed (raised by the petitioner; not decided on the merits). +1 more

Court's answer

If the individual Directors wish to file separate writ petitions against the characterisation of the transaction as fraud, it will be open to them to do so.

Ratio / Principle

Since the company is under liquidation, a CIRP has been appointed by the NCLT, Chennai, and the CIRP would not be interested in challenging the forensic audit report, the writ petition originally filed by the company can no longer be maintained and accordingly stands disposed of.

Detailed headnote1 paragraphs

Madras High Court (Single Judge - Hon'ble Mr. Justice D. Bharatha Chakravarthy), W.P. No.11828 of 2025 with W.M.P. No.13395 of 2025, decided 25.04.2025 - Best And Crompton Engineering Projects Ltd. v. Central Bank of India, Corporation Bank and Union Bank of India. The petitioner company, under Article 226 of the Constitution of India, sought a writ of certiorari to quash an undated forensic audit report obtained by the 1st respondent bank vide communication No.CO/GM/RECV/2013-14/3788 dated 28.02.2014, together with the classification of the company's accounts as fraud by respondent Nos.1 to 3 on 22.10.2014, 09.11.2017 and 08.03.2016 respectively, as reported to the Reserve Bank of India, on grounds of arbitrariness, malice and unreasonableness. Held: as the company was under liquidation and a CIRP had been appointed by the National Company Law Tribunal, Chennai, and the CIRP would not be interested in challenging the forensic audit report, the writ petition filed by the company could no longer be maintained and stood disposed of. The court observed that individual directors would be at liberty to file separate writ petitions against the fraud characterisation. Connected miscellaneous petition closed; no order as to costs. The merits of the fraud classification were not decided and no precedent was discussed.

W.P.No.11828 of 2025

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED :25.04.2025

CORAM

THE HONOURABLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY

Writ Petition No.11828 of 2025 & W.M.P.No.13395 of 2025

Best And Crompton Engineering Projects Limited., Rep By its Director, Mr.Ippagunta Seshagiri Rao, No.42, 1st Floor, Sterling Road, Nungambakkam, Chennai-600 034. ... Petitioner

/versus/

Central Bank of India, Corporate Finance Branch, Rep By Its Asst.General Manager, Addison Buildings, No.803, Anna Salai, Chennai-600 002.

2.Corporation Bank, Rep By Its Deputy Zonal Manager, Zonal Office, Chennai. 3.Union Bank of India, (Formerly Andhra Bank), Zonal Office, Rep. By Its Zonal Manager, No.139, Prakasam Road, Mannadi Police Colony, George Town, Chennai-600 001. ... Respondents

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W.P.No.11828 of 2025

Writ Petition has been filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, calling for the records of the undated impugned forensic audit report in respect of the petitioner company obtained by the 1^st respondent vide communication No.CO/GM/RECV/2013-14/3788, dated 28.02.2014 including the classification of the account of the petitioner company's accounts as fraud by respondent Nos.1 to 3 on 22.10.2014, 09.11.2017 and 08.03.2016 respectively that was reported to the Reserve Bank of India on the ground of arbitrariness, malice and unreasonableness and quash the same.

For Petitioner : Mr.S.Kamalakannan, for Ms.Jayasudha.K For Respondents : Mr.Anil Relwani.

O R D E R

The writ petition is filed by the petitioner Company namely, M/s.Best and Crompton Engineering Projects Limited. As on today, it is represented that the Company is under Liquidation and already CIRP has been appointed by the National Company Law Tribunal, Chennai.

2. Since, this writ petition is challenging the Forensic Audit

Report, the CIRP will not be interested in challenging the same. Therefore, the writ petition originally filed by the Company, can no more be maintained, the same stands disposed of.

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W.P.No.11828 of 2025

3. It is needless to mention that if the individual Directors want to

file separate writ petition as against terming the transaction as fraud, it will be open to them to do so.

Consequently, connected Miscellaneous petition is closed. There shall be no order as to costs.

25.04.2025 Neutral citation :Yes/No. bsm To, 1. The Assistant General Manager, Central Bank of India, Corporate Finance Branch, Addison Buildings, No.803, Anna Salai, Chennai-600 002. 2. The Deputy Zonal Manager, Corporation Bank, Zonal Office, Chennai. 3. The Zonal Manager, Union Bank of India, (Formerly Andhra Bank), Zonal Office, No.139, Prakasam Road, Mannadi Police Colony, George Town, Chennai-600 001.

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W.P.No.11828 of 2025

D.BHARATHA CHAKRAVARTHY, J.

bsm

Writ Petition No.11828 of 2025

25.04.2025

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