Bank of Baroda v. Ratul Puri

1. This application seeks correction of certain inadvertent errors. The error of which this application seeks correction is in the reference, in para 43(iii) of judgment dated 8 August 2025, to the effect that the FAR has not arrived at any conclusion regarding diversion of funds by MBIL and that this conclusion was arrived at only by the Identification Committee and the Review Committee.

2. Accordingly, para 43 (iii) shall stand reworded thus: “43(iii) Every default – assuming a default had taken place – is not “wilful default”, within the meaning of the Master Circular. A default, in order to be wilful, had to be “intentional, deliberate and calculated”. It cannot be said, by any stretch of imagination, in the facts of the present case as were before the learned Single Judge and as are before us, that any event of “wilful default”, on the part of MBIL or the Respondent, had taken place. It is LPA 396/2024 inconceivable as to how the Identification Committee and Review Committee arrived at such a conclusion even without examining the source of funds. The Identification Committee and the Review Committee, appear to have proceeded on a completely misguided premise that investment of any funds of MBIL, in its subsidiaries, would constitute diversion of funds. Clause 2.[2] (c) of the Master Circular sets this at rest, by envisaging only transfer of “borrowed funds” to subsidiaries as diversion of funds. Without a scintilla of material to indicate that MBIL had transferred any borrowed funds to its subsidiaries, the Identification Committee and the Review Committee came to a conclusion that MBIL had diverted its funds within the meaning of the Master Circular.”

3. The application is accordingly allowed.

4. This order shall be treated as a corrigendum to the judgment dated 8 August 2025 in which para 43(iii) shall stand replaced with the above para.

5. Let a copy of this order be emailed to all counsel by the Registry of this Court forthwith.

C. HARI SHANKAR, J.

AJAY DIGPAUL, J.