Umesh Chunilal JumaniversusBank of India

       Digitally
       signed by
       MEERA
MEERA MAHESH
MAHESH JADHAV
JADHAV Date:
       2026.10.09
       15:23:19
       +0530
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                                   IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                       ORDINARY ORIGINAL CIVIL JURISDICTION
                                          WRIT PETITION NO. 4286 OF 2025

                    Umesh Chunilal Jumani                         )
                    Aged 57 years, Occupation business            )
                    residing at Flat No.403, Ishaan               )
                    Apartments , Anand Sai Marg,                  )
                    Clarke Town, Nagpur-440014                    )   ...Petitioner
                           Versus
                    1. Bank Of India                              )
                    through its branch office at Andheri          )
                    Large Corporate Branch, MDI Building          )
                    1st floor, 28, S. V. Road, Andheri West,      )
                    Mumbai 400 058                                )
                    Email:- AndheriLCB.mumbainorth@               )
                    bankofindia.co.in                             )

                    2. Reserve Bank of India                      )
                    A statutory body constituted under the        )
                    Reserve Bank of India Act, 1934,              )
                    through the Governor of the RBI, having       )
                    his office at Central Office Building,        )
                    Shahid Bhagat Singh Road,                     )
                    Fort, Mumbai 400001                           )   ...Respondents

                                                   __________
                    Mr. Ankit Lohia, Mr. Jaideep Singh Khattar, Mr. Bhagyesh Witkar i/b The
                    Fort Circle for Petitioner.
                    Mr. Anant B. Shinde for Respondent No.1.
                    Mr. Pradeep Mane a/w Mr. Huzan Bhumgara, Shubhi Dotiya i/b Desai &
                    Diwanji for Respondent No.2.
                                                   __________

                                         CORAM :    SARANG V. KOTWAL &
                                                    RANJITSINHA RAJA BHONSALE, JJ.

                                         DATE   :   7th OCTOBER 2026.



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JUDGMENT:- (PER SARANG V. KOTWAL, J.)


1.         Heard, Mr. Ankit Lohia, learned counsel for the Petitioner, Mr.

Anant Shinde, learned counsel for the Respondent No.1 and Mr. Huzan

Bhumgara, learned counsel for the Respondent No.2.

2.         Rule. Rule made returnable forthwith with the consent of the

parties.

3.         The Petitioner has challenged the order dated 11 th August 2025

passed by the Respondent No.1- Bank of India, declaring the Petitioner

as fraud.

4.         The case of the Petitioner is as follows:

           The matter pertains to the company by the name Paramshakti

Steels Ltd. (hereinafter referred to as “PSL”). It was incorporated on 31 st

May 1995 and was in the business of trading in steel and steel products.

Over the time, PSL availed credit facilities from Union Bank of India and

State Bank of India apart from the Respondent No.1 Bank of India. The

Petitioner was appointed as a non-executive director of PSL on 11 th

March 2005. The documents to that effect are annexed to the additional

affidavit at Exhibits B and C. There is no dispute about those documents

that the Petitioner was specifically described as a non-executive director.

The Petitioner resigned on 31st July 2015. A copy of that document is



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annexed at Exhibit A to this Petition. There is no dispute about this

document as well. It is the case of the Petitioner that he was not

involved in the day to day management of the affairs of PSL. He had

not availed any loans in his personal capacity from PSL, nor he had

been a signatory or guarantor to the borrowings availed by PSL from

the Respondent No.1. He was never a promoter of PSL and had no

authority to operate any banking account on behalf of PSL. He was not

even a         shareholder of PSL. Subsequent to the resignation of the

Petitioner from PSL, Respondent No.1 had again sanctioned both fund

and non-fund-based credit facilities. The last credit facilities were

sanctioned to PSL on 31st October 2015, i.e., after the Petitioner had

resigned. The Petitioner had no role to play in so far as the sanctioning

of the credit facilities during that time was concerned. There was no

default or delay in payment of the credit facilities availed from the

Respondent No.1.

5.        Suddenly, the Petitioner received a show cause notice dated

24th September 2021 calling upon to show cause as to why his name

should not be included in the list of willful defaulters. The Petitioner

responded to that notice. Thereafter, the proceedings pursuant to that

show cause notice were not taken forward. However, at that time, the

Petitioner had made enquiries about the affairs of PSL. He came to

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know that at the instance of Union Bank of India as a financial creditor,

PSL was admitted to insolvency. The committee of creditors including

the Respondent No.1-Bank of India was formed. The Respondent No.1

held 42.99% of the voting share as part of creditors. After the approval

of the committee of creditors, the resolution plan was presented to

NCLT, which was approved by the order dated 14 th February 2019. Vide

the orders dated 14th February 2019 and 21st February 2019, the

corporate insolvency resolution process was completed. The Respondent

No.1 challenged the resolution plan before the NCLAT and then before

the Hon’ble Supreme Court; but their challenge was unsuccessful. In

this background, the Respondent No.1 conducted a forensic audit

through M/s. Baltiboi and Purohit and forensic audit report dated 20 th

June 2020 was submitted.

6.        The Respondent No.1 again issued a show cause notice dated

4th May 2024 to the Petitioner. The Petitioner again responded to the

show cause notice by giving his reply on 25 th May 2024. The Petitioner’s

name did not feature in the forensic audit report nor in the FIRs filed by

Union Bank of India and State Bank of India against third parties. No

role was attributed to the Petitioner in the forensic audit report. Inspite

of that, the Respondent No.1 ignored the Petitioner’s reply and passed

the impugned order, which was completely unreasoned. In this

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background, the Petitioner has approached this Court.

7.        Learned Counsel for the Petitioner submitted that the Petitioner

was a non-executive director between 11 th March 2005 to 31st July

2015. There is absolutely no role attributed to the Petitioner in the

forensic audit report, Show Cause Notice or even in the impugned

order. PSL was declared as NPA after the resignation of the Petitioner.

Till he was the non-executive director, there were no allegations of

default of making payment in the credit facility. The impugned order

does not even advert to the fact that the Petitioner was a Non-Executive

Director. It is an unreasoned order. The Learned Counsel relied on two

orders passed by another Division Bench of this Court in cases of two

other Directors of PSL. He relied on the order dated 21st July 2026

passed in Writ Petition No.4218 of 2025 in the case of Vinod Garg Vs.

Bank of India & Anr. He also relied on the order dated 3rd July 2026

passed in Writ Petition No.3863 of 2025 in the case of Ankit Rajendra

Kumar Choudhary Vs. Bank of India & Anr. In both these orders, the

Division Bench had taken a view that the impugned orders in respect of

the Petitioners therein were unsustainable for the similar reasons. He

therefore, submitted that the Petitioner also be granted similar reliefs by

setting aside the impugned order.

8.        Learned Counsel for the Respondent on the other hand relied

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on the observations made in the impugned order. He submitted that the

Master Directions on Frauds does not make any distinction between the

Director and the non-executive Director for the purpose of declaring a

particular person as fraud. He submitted that sufficient reasons are

mentioned in the impugned order. The forensic audit report shows that

the fraud is committed by PSL and the Petitioner was also responsible.

9         We have considered these submissions. Clause 2.1.1.4 of

Master Directions on Fraud dated 15th July 2024 issued by Respondent

No.2-RBI reads thus:

           “2.1.1.4 A reasoned Order shall be served on the
           Persons / Entities conveying the decision of the bank
           regarding declaration / classification of the account as
           fraud or otherwise. Such Order(s) must contain
           relevant facts / circumstances relied upon, the
           submission made against the SCN and the reasons for
           classification as fraud or otherwise.”


10        In the present case, we find that there are absolutely no reasons

given in the impugned order. Upto paragraph 5, the entire averments in

the show cause notice are reproduced. Paragraph 6 mentions that show

cause notice has been served on the Petitioner, and in response, the

Petitioner had made written submissions by the letters dated May 2024

and April 2025. Paragraphs 7 and 8 of the impugned order read thus:

           “7. Pursuant to the receipt of written submission of
           the Noticee, the Fraud Monitoring Group (FMG) of

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           the Bank has carefully examined the Forensic Audit
           Report/Internal Investigation Report, the written
           submission of the Noticee and facts on record. The
           FMG have come to the following conclusion based on
           the above:

           S. No.      Name                        Classification
           1.          Mr. Umesh Jumani            Fraud

               8. The above indicates clear diversion/siphoning of
               funds and utilizing the funds for purposes other than
               for which it was granted thereby causing wrongful
               loss to the Bank and wrongful gain to the Noticee
               with the intention to defraud the Bank causing loss of
               public money. The committee also finds that Noticee
               were the promoters, directors of the Company at the
               time when the transactions had taken place and
               cannot be without their consent and connivance.
               Further, the Noticee have not been able to prove that
               the transactions have taken place without their
               knowledge or consent.”


11.       From these paragraphs, it is quite clear that there are no

reasons given by the Respondent No.1. There is no reference to his

resignation on 31st July 2015. There is a vague statement that the

noticee were the promoters, directors of the company at the time when

the transactions had taken place and cannot be without their consent

and connivance. It is undisputed from the record that the Petitioner was

never a promoter of the said company. This also shows non application

of mind while passing the order.

12.       It is also undisputed that in the entire forensic audit report


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there is no reference to the present Petitioner in particular and no

specific role is attributed to him. The Petitioner was never a guarantor

of the credit facility availed by PSL.

13.       The observations made in both the orders of the Division Bench

in the case of Vinod Garg Vs. Bank of India & Anr. and Ankit Rajendra

Kumar Choudhary Vs. Bank of India & Anr., are squarely applicable to

the facts of the present case. In this view of the matter, we are inclined

to allow this Petition.

14.       Learned Counsel for the Respondent No.1 submitted that in

case the impugned order is to be set aside, then liberty be granted to

the Respondent No.1 to initiate fresh proceedings. We have considered

this request, however, we do not find that in the present facts of the

case any purpose will be served by starting the proceedings afresh

against the present Petitioner because no material is pointed out

anywhere to show as to how the Petitioner was involved in the

allegations made against PSL. Hence the following order:

                                     ORDER

I)        Rule is made absolute in terms of prayer clause (a), which

reads thus:

               “a) This Hon'ble Court be pleased to issue writ of
               certiorari or writ in the nature of certiorari or any
               other writ, order or direction and call for the records

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               and the proceedings, pursuant to which the Petitioner
               has been declared as a fraudulent borrower vide order
               dated 11 August 2025 passed by Respondent no. 1,
               and after examining the legality and validity of the
               same, quash and set aside the same.”

II)       With the aforesaid observations, the Petition is disposed of.




(RANJITSINHA RAJA BHONSALE, J.)                  (SARANG V. KOTWAL, J.)




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