DEVANSHU PRAVEEN DESAIversusCENTRAL BANK OF INDIA

     IN THE HIGH COURT OF JUDICATURE AT BOMBAY
              ORDINARY ORIGINAL CIVIL JURISDICTION

                     WRIT PETITION NO. 4216 OF 2024

Devanshu Praveen Desai                        …. Petitioner.

         Vs

1. Central Bank of India
2. The Wilful Defaulter Identification
Committee of Central Bank of India
3. The Wilful Defaulter Review
Committee of Central Bank of India
4. Reserve Bank of India
5. Trans Union CIBIL Limited                  ….Respondents.

Mr. Simil Purohit, Senior Advocate a/w Mr. Punit Damodar, Ms. Nikita
Vardhan, Ms. Nidhi Pathak and Mr. Labham Chaturvedi i/b Kanga &
Company for the Petitioner.

Mr. Rathina Maravarman for Respondent Nos. 1, 2 and 3(Central bank
of India)

Mr. Benny Joseph, Mr. Usama Shaikh, Mr. Riyan Adi Jijina, Mr.
Siddesh Kini i/b BJ Law Offices LLP for Respondent No.4.


                      CORAM : SUMAN SHYAM &
                              GAUTAM A. ANKHAD, JJ.

                      DATE       : 17TH SEPTEMBER, 2026.


P.C. :


1.       Rule. Rule is made returnable forthwith and the matter is taken up

for final hearing at the admission stage with the consent of the parties.

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2.      The Petitioner seeks quashing of a Show Cause Notice dated 16 th

June 2020 (“SCN”) issued by Respondent No.1-Bank; and Order dated

10th May 2022 issued by Respondent No.2-the Wilful Defaulter

Committee of Respondent No.1 Bank (“the Impugned Order”).



3.      The Petitioner was an Independent, Non-Executive Director of the

Company viz. Parekh Aluminex Limited (“PAL”) for a limited period

from 30th June 2006 to 8th August 2016. The Petitioner was issued the

SCN and the Impugned Order in his capacity as the Director of PAL.



4.      Mr. Purohit, learned senior counsel for the Petitioner, submits that

the Petitioner was denied an opportunity of hearing inasmuch as the

documents and material sought by him, and relied upon by Respondent

No.1 in support of the allegations against him, were not furnished to him.

The Petitioner repeatedly sought such documents by letters dated 4 th

November 2016, 30th December 2016, 7th April 2022, 7th May 2022, 22nd

June 2022 and 4th August 2022 addressed by the Petitioner’s Advocates

to Respondent No.1. Despite these requests, the proceedings culminated

in the Impugned Order declaring the Petitioner a wilful defaulter. This is

in violation of Principle of Natural Justice and the action of Respondent

No.1 is also in contravention of the RBI’s Master Circular on Wilful

Defaulters dated 1st July 2015. Hence, this Court ought to pass
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appropriate orders to quash the SCN and the Impugned Order. In support

of the above submissions, reliance is placed on the following judgments:



          (a) Milind Patel Vs. Union of India & Ors. [(2024)

          SCC Online Bom 745]

          (b) State Bank of India Vs. Jah Developers Pvt. Ltd.

          & Ors. [(2019) 6 SCC 787]



5.      Mr. Rathina Maravarman, learned counsel for Respondent No.1,

could not dispute or dislodge the assertion that Respondent No.1 has not

provided some of the documents as demanded by the Petitioner.



6.      In the light of the submissions made by the learned counsels for

both the parties, we are inclined to quash and set aside the Show Cause

Notice dated 16th June 2020 and Impugned Order dated 10th May 2022.

The statutory procedural mechanism laid down in the RBI’s Master

Circular and interpreted in the various judgments of the Hon’ble

Supreme Court is required to be followed by Respondent Nos. 1 to 3. An

opportunity of hearing can be meaningful only when the person

concerned is in a position to understand the case he has to meet and to

effectively controvert the material relied upon against him. This

requirement assumes significance in proceedings for declaration of a

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person as a wilful defaulter. In Jah Developers (supra), the Hon’ble

Supreme Court examined the consequences of a person being declared

as a wilful defaulter under the Master Circular. The Hon’ble Court held

that a person declared as wilful defaulter affects the fundamental right of

a person under Article 19(1)(g) of the Constitution as it directly affects

the right to do business and thus, the Master Circular must be construed

reasonably. The judgment of this Court in Milind Patel (supra) further

makes it clear that the obligation of disclosure is not confined merely to

the documents expressly relied upon in the SCN. The material which

may have a bearing upon, or may undermine, the allegations contained in

the SCN is also required to be disclosed, so that the authority deciding

the matter has before it all relevant material necessary to arrive at a fair

and informed conclusion.



7.      In these circumstances, this Writ Petition is allowed in terms of

prayer clauses (a) and (b). Rule is made absolute.



8.        Needless to state that all/any consequential action(s) taken

pursuant to the Impugned Order are also quashed and set aside. Since the

interference is on procedural grounds, and if any cause survives in the

matter, we grant liberty to Respondent Nos.1 and 2 to issue a fresh SCN

alongwith documents to the Petitioner and proceed in the matter in
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                      accordance with law. It is clarified that we have expressed no opinion on

                      the merits of the allegations against the Petitioner, and all contentions of

                      the parties on merits are kept open.



                      9.      There shall be no order as to costs.



                      [ GAUTAM A. ANKHAD, J. ]                         [ SUMAN SHYAM, J. ]

BHARAT
DASHARATH
PANDIT

Digitally signed by
BHARAT
DASHARATH
PANDIT
Date: 2026.09.18
17:30:16 +0530




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