Sh. Lagadapati Madhusudhan Rao & Ors. v. IDBI Bank Limited

Delhi High Court · 13 Dec 2024 · 2024:DHC:9706
Manoj Jain
W.P.(C) 17125/2024
2024:DHC:9706
administrative petition_allowed Significant

AI Summary

The Delhi High Court held that a petitioner's ambiguous communication must be treated as a request for personal hearing, directing the bank to consider it and setting aside the impugned order passed without such consideration.

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W.P.(C) 17125/2024 1
HIGH COURT OF DELHI
Date of Decision: 13th December, 2024
W.P.(C) 17125/2024, CM APPL. 72739/2024, CM APPL. 72740/2024
& CM APPL. 72741/2024 SH. LAGADAPATI MADHUSUDHAN RAO & ORS. .....Petitioner
Through: Mr. Dayan Krishnan, Senior Advocate
WITH
Mr. Malak Bhatt, Ms. Neeha Nagpal and Ms. Nitya Prabhakar, Advocates
VERSUS
IDBI BANK LIMITED .....Respondent
Through: Mr. Sidhartha Barua and Mr. Anuraag Mehta, Advocates
CORAM:
HON'BLE MR. JUSTICE MANOJ JAIN
JUDGMENT
(oral)
CM APPL. 72740/2024 (exemption)
Exemption allowed, subject to just all exceptions.
W.P.(C) 17125/2024, CM APPL. 72739/2024 & CM APPL. 72741/2024

1. Learned counsel for respondent-Bank appears on advance notice.

2. After hearing learned counsel for both the sides, this Court is of the considered opinion that the present writ petition can be disposed of on a very limited but important aspect.

3. This is not the first round of litigation.

4. Earlier, petitioner had filed a W.P. (C) No. 928/2024.

5. While aforesaid petition was filed, the petitioner had challenged the show cause notices issued by several banks, including IDBI Bank which was W.P.(C) 17125/2024 2 impleaded as respondent no. 8 in the aforesaid writ petition. While disposing of the aforesaid writ petition, the Co-ordinate Bench of this Court issued certain directions which are contained in Para-11. These read as under: -

“11. Accordingly, the following directions are issued:
(i) The petitioners and/or their authorized representative, shall be allowed inspection of the records of the company, as available with the respondent banks, on the basis of which, the SCNs were issued to the petitioners.
(ii) Since, record of the company is also stated to be in the possession of the liquidator, it is directed that the petitioners and/or his authorized representative, shall also be allowed to inspect the record of the company, as available with the liquidator.
(iii) Upon inspection of the record, as made available by the respondent banks and the liquidator, the petitioners shall state the specific documents, that are required from the said record. The same shall be provided to the petitioners, thereafter.
(iv) The cost of providing copies of the relevant documents to the petitioners, shall be borne by the petitioners.
(v) The aforesaid process of inspection of the record of the company and stating the specific documents, shall be completed by the petitioners, within a period of ten days. The process of providing the relevant documents to the petitioners, shall be completed by the respondent-banks and the liquidator, within a period of ten days, thereafter.
(vi) Upon receipt of the documents, the petitioners shall file reply to the SCNs, within a period of two weeks, thereafter.
(vii) The petitioners are at liberty to make request for personal hearing to the respondent-banks, which shall be considered, accordingly.”

6. Feeling aggrieved, IDBI Bank (respondent no. 8 in the aforesaid writ petition) filed LPA which was registered as LPA No. 550/2024. The grievance raised by the IDBI Bank was with respect to the liberty granted by the Court to the concerned petitioner for making request for personal hearing.

7. After hearing both the sides, learned Division Bench, while observing that the aforesaid direction was not mandatory in nature held as under:- W.P.(C) 17125/2024 3

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“10. Consequently, the present appeal along with the applications is disposed of with liberty to the Appellant-Bank to either accept or reject the Respondents’ request for personal hearing. It is clarified that it shall be open to the Appellant-Bank to reject the request of the Respondents for personal hearing on the grounds stated in the present appeal. However, the Appellant-Bank shall give reasons for arriving at its conclusion. Needless to state, in the event the Respondents are aggrieved by the decision of the Appellant- Bank, they shall be at liberty to challenge the same in accordance with law. The rights and contentions of all the parties are left open.”

8. Such order is dated 08.07.2024.

9. According to the petitioner, a request in this regard was made to IDBI Bank by sending a communication on 15.10.2024 which was never considered and the Fraud Examination Committee-I has gone ahead and passed the order which is impugned herein.

10. It is stated that the petitioner was not even communicated whether such request had been considered, accepted or rejected and, therefore, further follow-up action taken up by the Bank is in teeth of the aforesaid specific directions passed by learned Division Bench.

11. This Court has seen the aforesaid communication sent by the petitioner to IDBI Bank.

12. Quite evidently, the same is not happily worded as petitioner had asked to convene a Joint Lenders Meeting (JLM) and expressed his inclination to join and participate in the aforesaid meeting either in person or through videoconferencing to sort out the issues of the documents with the bank. Undoubtedly, in the aforesaid communication, he also made reference about the order of this Court in Para-9 but all-in-all, the aforesaid communication was not very clear and specific in indicating that he was, actually speaking, W.P.(C) 17125/2024 4 seeking a personal hearing in relation to the core issue involved in the present case.

13. Learned counsel for the respondents also submits that the aforesaid request was received by IDBI Bank but it was not, at all, suggesting as if he was seeking a personal hearing and, therefore, there was no reason to consider or respond to the same.

14. As noticed above, the aforesaid communication, though after the disposal of the aforesaid LPA, is not happily worded and, therefore, it seems that there was no response from IDBI Bank to the aforesaid communication.

15. During course of arguments, learned Senior Counsel for petitioner did admit, in all fairness, that the expression used in the aforesaid communication could have been better. He, however, submits that the aforesaid communication may be deemed as a request for personal hearing to IDBI Bank and submits that IDBI Bank may, therefore, be requested to consider the same and to take appropriate decision in terms of the directions contained in order dated 08.07.2024.

16. Keeping in mind the aforesaid peculiar facts, the present writ petition is disposed of with the following directions:i. The communication dated 15.10.2024 shall be treated as a request for personal hearing. ii. The IDBI Bank shall consider the aforesaid request in terms of the specific directions contained in Para-10 of order dated 08.07.2024 passed by learned Division Bench of this Court in LPA No. 550/2024. iii. The fate of the aforesaid request shall be duly communicated to the petitioner. W.P.(C) 17125/2024 5

17. As a necessary corollary, the impugned order dated 28.11.2024 is also set aside.

18. Needless to say, IDBI Bank would be at liberty to take further requisite steps after deciding the aforesaid representation/application dated 15.10.2024.

19. All the other rights and contentions raised in the present writ petition are left open.

JUDGE DECEMBER 13, 2024