9911796707
TMI Blog2019 (8) TMI 1142X X X X Extracts X X X X X X X X Extracts X X X X ..... committees are established, the Master Circular requires that a bank having material to proceed against an account, to have the same declared as a wilful defaulter, under such Master Circular, to place such material before the Identification Committee. Upon the Identification Committee being satisfied with the sufficiency of the materials placed before it, and is of the view that, there are sufficient grounds to suspect that, the account can be classified as a wilful defaulter, then, it is required to issue a show-cause notice to the account holder, for such account holder to respond thereto. The response is thereafter considered by the Identification Committee. If the decision of the Identification Committee is adverse to the account holder, then, the account holder is at liberty to prefer an appeal before the Review Committee, within the period stipulated. On such an appeal, the Review Committee is to decide such appeal in accordance with law. In the present case, the decision of the Review Committee under challenge, is not informed with reasons. Although, the Review Committee is at liberty to concur with the finding of the Identification Committee, it has to deal with the repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing by the Review Committee to the petitioner is mandatory. Since no notice was given, the impugned decision of the Identification Committee is bad in law. He has drawn the attention of the Court to the decision of the Review Committee and submitted that, the decision itself, is uninformed with reasons. The order of the Review Committee merely reiterates what the Identification Committee allegedly held. Application of mind of the Review Committee is not apparent from the Order Sheet of the Review Committee. Therefore, according to him, the Order of the Review Committee should be quashed. Learned Advocate appearing for UCO Bank has questioned the locus standi of the person verifying the writ petition. He has submitted that, the writ petition is affirmed by the authorised signatory of the resolution professional of the Company. Since there is a liquidator appointed over the affairs of the Company and since the liquidator is not prosecuting the petition, the writ petition should be held as not maintainable. Referring to M/s. Jah Developers Pvt. Ltd. & Ors. (supra), learned Advocate appearing for UCO Bank has submitted that, the Review Committee did not have the benefit of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debt Restructuring process in the year 2012-2013. Master Restructuring agreement dated December 27, 2012 subsequently amended on March 30, 2013 was entered into. The Company however failed to pay its debts. The Company has claimed that, the product manufactured by the Company suffered technological obsolescence and therefore became unviable. The second writ petition is at the behest of the guarantors of the credit facilities enjoyed by the Company. In both the writ petitions, challenge has been levelled against a decision of the Review Committee dated July 9, 2018. The Bank has proceeded against the petitioners in both the writ petitions under the provisions of the Master Circular on Wilful Defaulters dated July 1, 2015. M/s. Jah Developers Pvt. Ltd. & Ors. (supra) has considered the Master Circular on Wilful Defaulters dated July 1, 2015 and the Master Circular on Wilful Defaulters dated July 1, 2013. It has considered the Master Circular on Wilful Defaulters in the context of allowing the borrower an opportunity to defend himself before he is declared a Wilful Defaulter and held that, however, under the revised circular of 2015, the borrower is only entitled to one opportunity t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her of the two writ petitions before the Court, the petitioners therein have challenged the decision of the Identification Committee or the steps and procedures taken upto the decision of the Review Committee. The Master Circular on Wilful Defaulters dated July 1, 2015 contemplates two tier decision making process for the purpose of identification of a wilful defaulter. The Master Circular contemplates establishment of an Identification Committee consisting of the specified number of personnel with the requisite qualifications and the Constitution of a Review Committee, again of the requisite number and qualification. Once such committees are established, the Master Circular requires that a bank having material to proceed against an account, to have the same declared as a wilful defaulter, under such Master Circular, to place such material before the Identification Committee. Upon the Identification Committee being satisfied with the sufficiency of the materials placed before it, and is of the view that, there are sufficient grounds to suspect that, the account can be classified as a wilful defaulter, then, it is required to issue a show-cause notice to the account holder, for such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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