Dismissed

Yashdeep Sharma v. Bank of Baroda

Telangana HC15 Oct 2024WP/24953/2023

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition challenging a Show Cause Notice issued by Bank of Baroda under RBI fraud guidelines. The Court held the petition was premature as the borrower had been given an opportunity to reply with the audit reports enclosed, satisfying natural justice requirements.

What did the court decide?

The writ petition was dismissed; the petitioner was granted 15 days to reply to the Show Cause Notice.

Yashdeep Sharma Vs Bank of Baroda — Banking and Recovery | Telangana HC (2024)

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[^340s I

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HIGI{ COURT'FOR THE^{STATEOF TELANGANA} AT HYDERABAD (Special Original .,!urisdiction)

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TUESDAY ,THE FIFTEENTH^{DAYOF OCTOBER} TWO THOUSAND AND^{TWENTY FOUR}

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PRESENT

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THE FIONOURABLE SMT^{JUSTICEMOUSI.II..IMIEHATTACHARYA}

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WRIT PETITI^{ON.NO:24953OF 2023}

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Between:

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Yashdeep Shan.'ra, Sio Shn Laxmi^{NarayanSharma'-R/o Flat No 9Q4, Tower} i,--Blo;-li- Ar\cc^{'uroan Gardenia,Hitec city Main Road,lvladhapur,} K.V.Rangareddy, Telangana⁵⁰⁰ 081

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...'ETIT'ONER

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AND

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BankofBaroda,StressedAssetManagementBranch,45,[rlooreStreet' JBAS aritding, 4th Floor,^{Chennai- 600001 Al\oat. Zonal Stressed Assels} ne.*ur,^gtr;ch, No-.^{A-1-Aqt13, First Floor. Khusru Jung^House,Secretariat} noaO, S5itaUaO, Hyderabad^{- 50OO0'4,tndiaCor-porateOffice' Corporate} Financial ServicesEranch,^{1st Floor,3-5-262!2. TnirumaiaEstates Building,} Himayatnagar, Hytlerabad^- Telangana.

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...RESPONDENTS

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Petrtion undei. Article²²⁶ of^{the constitutior!cf lndia prayingthat in the} circumstances stated in^{the affidavit filedtherewith,the High Cotldmay be} pleased to issue a writ, order or^{directionin the nature of writ of certiorarisetting} asicietheimpugnedshowcausenoticedatedlS.0S.2023issuedbythe Respondent Bank under^{the RBI lvlaster Directionscn Frauds as beingvioiative} of orinciples of naturai^jttstice

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lA NO: 2 OF 2023

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Petition unoer Section^{151 CPC pray:ng that in the cit;urnstancesstated} in the affiCavit filed in suppori of the oetition,^{the l-1igh Court mavtre pleased to} direct/orcer interim stay^{on proceeding initiatedby the Respondent Bairr.vide the} impugned show cause^{noticedated18.08.2023 underthe RBI Master Directions} on Frauds till the^{final disposalof this writ petition and/orto pass}

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lA NO: 3 OF 2023

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Petition under Section 151 CPC^praying that in the circumstances stated in the affidavit filed ir support of the petition, the High Court may be^pleased to pass orders extendirrg the interim order granted.to the petitioner first vide order dated 08/09/2023 an,l extended vide order dated 1111012023

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Counsel for the Petitioner: SRl. VANAPARTHI VAISHALI

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Counsel for the Respondent: SRI SRINIVAS CHITTURU (SC FOR BANK OF BARODA)

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The Court made the following: :ORDER

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THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA

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WRIT PE-TIT roN NO.24953 0F 2023

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Sri Suraj Prakash, learned counsel representing^{Ms V.Vaishali, learned counsel} for the pelilioner

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Sri Srinivas Chitturu, learned counsel^{for the respondent.}

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ORDER

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The writ petition has been filed^{challengingthe ShowCause} Notice dated 1a.O8.2O23 issued^{by the respondent- Bank to the} petitioner. The only prayer in the writ^{petition is to set aside the} Show Cause Notice as being^{in violationof the principlesof natural} justice.

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The Show Cause Notice^{was issuedin respect of certain} irregularities observed in the^{loan account of the petitioner in the} context of fraud under the^{Guidelinesof the Reserve Bank of India} (RBr).

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Learned counsel for the^{petitioner submits that the Show} Cause Notice should be^{set aside as it does not have the relevant} particulars. Counsel relies on^{the RBI Circular of July, 2024 in} support of his contention.^{Counselfurther submits that the} respondent - Bank did^{not comply with the principlesof natural} justice and hence falls foul of the^{judgmentof the Supreme Court} in Stote Bank of India^{Vs. RajeshAganDall.}

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I 2023 SCC OnLine SC 342

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w.P.No.zasse off;oi!

l,earned counsel. appearing for the respondent - Bank^places the relevant praragraph of the^judgment delivered by the Supreme Court and su:rmits that a copy of the Special Audit Report as^weli as the Transaction Audit Report were' enclosed with the Show Cause Notice. Counsel further submits that the respondent - Bank has simply issued the Show Cause Notice ald has not taken any further steps')ursuant to thb Show Cause Notice.

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After hearing learned counsel for the parties, this Court is of the view that the writ petition is premature. The writ petition has been hled only against the Show Cause Notice. The Show Cause Notice specihc:ally asks the petilioner to reply to the Notit:e within a period of 15 days. Hence the petitioner has been given an opportunity tr> take all the defenses available to him against the Show Cause Notice. There cannot be any complaint with regard to the violation of the principles of natural justice since the Audit Reports whictr forms the Basis of the Show Cause Notice, namely, the Special Audit Report and the Transaction Audit Report were also enclosed with the impugned Show Cause Notice.

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Paragraph 87 of Rajesh Aga naal (supra) specifically holds that the borrc,rx,er must be served Notice and given an opportunity to explain the conciusion of the Forensic Audit Report and also be allowed to be represented before their accounts are classihed as I fra{d under the Master Directions on Fraud. The Suprr:me Court

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MB'J W.P.No.24953^{oJ 2023}

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judgment proceeds to hold that the^{classit/ingdecisionmust also} be made by a reasoned^{order.Thereis no reasoned order passed} in the present facts since^{the writ petitionis based on the Show} CauseNotice.Theconclusionoft}reRajeshAganlol(supra)has been followed by^{the respondent - Bank in not only givingan} opportunity^{to the petitioner to reply to the Show CauseNotice but} also enclosing^{the material documents whichform basis of the} allegations^{againstthe petitioner' There is no evidence in the} records that the^{petitionerhas been deprived of any opportunityto} explain the^{allegationsin the impugnedShow Cause Noticeor to} participate in the^{proceedingsby way ofa hearing'}

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The petitioner's^{grievanceor the grievanceof the borrower} can only be^{crystallized oncethere is a clear reflection of an} infraction^{of the principles of naturaljustice eitherby wayof the} petitioner being^{deprived ofhearing orupon passing ofan} unreasoned^{order classifying petitioner's accountas Fraud' None} of thetngredients I^{are present in this case lt is arguable whether} the recent Circular^{of the RBI will applyto the present case since} the Show^{Cause Noticepre-dates that Circular'In any event' the} petitioner will have^{a full opportunity to presentits case beforethe} concerned^{Committee/Forum'}

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w.e.No.zess olYoi!

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8 W.P.No.24953 of .2023, along with all connected applications,

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is accordingly clismissed. The petitioner is given 15 days time from 16.10.2024 to reply to the Show Cause Notice dated 18.08.2023.

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There shrrll be no order as to costs.

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SDI.^{N. R} AJ GO L ASSISTANT^R EGIST, R

//TRUE^COPY//

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ORDER

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WP.No.24953 of 2023

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DISMISSING THE WRIT PETITION WITHOUT COSTS

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Yashdeep Sharma v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

Yashdeep Sharma v. Bank of Baroda

Case brief

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