2020 (11) TMI 1123 - HC - Companies Law

Wilful defaulter - unlawful notice or not - case of the petitioner is that show cause notices were issued to the petitioner on 13.03.2020 and 31.10.2020 to show as to why the petitioner should not be declared as a wilful defaulter - HELD THAT - Admittedly, somewhat identical matter had come up before this court in RATUL PURI VERSUS STATE BANK OF INDIA ANR. 2020 (8) TMI 951 - DELHI HIGH COURT where it was held that 'any order passed by the said Committee shall not be placed in public domain for a period of four weeks. Further, a copy of the reasoned order shall be supplied to the petitioner after the Committee passes the same forthwith. Liberty is granted to the petitioner, if he is not satisfied with the order, to take steps as per law. This order is passed without prejudice to the rights and contentions of the parties.' In the facts of the present case, it would be appropriate to pass similar directions in the present case also - the petitioner is also free to request the respondent bank during the personal hearing to provide the documents which have been relied upon in the show cause notice or relied upon by the respondent bank, a copy of which have not been provided to the petitioner. Petition disposed off.

Summary

Issues:
Petitioner seeking writ to set aside/quash communication/Notice, Allegation of wilful defaulter, Lack of documents provided in show cause notice, Resignation as director, Previous court order for personal hearing, Request for documents during personal hearing, Conducting personal hearing through video conferencing.

Analysis:
The petitioner filed a writ petition seeking relief to set aside/quash a communication/Notice dated 31.10.2020 issued by the Respondent Bank, alleging it to be unlawful, illegal, and arbitrary. The petitioner was appointed as a director in a company in 2007 and resigned on 16.11.2012. The said company was declared as a Non-Performing Asset (NPA) by the respondent bank on 14.10.2012, with proceedings pending before the NCLT, which initiated liquidation proceedings on 30.05.2019. Show cause notices were issued to the petitioner on 13.03.2020 and 31.10.2020 to explain why they should not be declared a wilful defaulter.

The petitioner argued that all documents mentioned in the show cause notice and relied upon by the respondent bank were not provided to them. Additionally, the petitioner contended that the show cause notice was not issued by the Wilful Defaulter Committee and concerned functionaries, contrary to a Supreme Court judgment. The petitioner emphasized their resignation as a director in 2012, asserting that the show cause notices were misplaced. A previous court order directed the petitioner to appear before the Wilful Defaulter Identification Committee for a personal hearing, allowing the petitioner to request an adjournment for adequate preparation.

The court, considering the circumstances, directed the petitioner to appear before the Wilful Defaulter Identification Committee for a personal hearing. The petitioner was granted liberty to request the respondent bank to provide copies of documents not supplied earlier. The Wilful Defaulter Committee was instructed to provide these documents and allow the petitioner sufficient time to respond to the show cause notice. The petitioner was permitted to conduct the personal hearing from their residence or office through video conferencing. The court disposed of the petition with these directions, resolving all pending applications.