Anoop Seth vs Canara Bank & Anr.

JASGURPREET SINGH PURI, J. (Oral)

The present Civil Writ Petition has been filed under Articles 226/227 of the Constitution of India seeking issuance of a writ in the nature of certiorari for quashing and setting aside the impugned order dated 05.01.2026 (Annexure P-1), by which the petitioner has been classified as fraud.

Learned Senior Counsel for the petitioner has submitted that the respondent-Bank issued a show cause notice to the petitioner vide Annexure P-4 dated 22.11.2024 along with some other persons of the company alleging that various irregularities have been committed and in view of the Reserve Bank of India (Master Direction on Fraud Risk Management in Commercial Banks (including Regional Rural Banks) and All India Financial Institutions), 2024, various breaches have been committed by the petitioner. Thereafter, the petitioner filed a reply to the show cause notice vide Annexure P-5 dated 13.12.2024 and it was thereafter that the respondent-Bank replied to the aforesaid reply given by the petitioner to the show cause notice and the said reply filed by the respondent-Bank has been attached with the present petition as Annexure P-6 dated 20.05.2025 and a perusal of the same would show that along with the aforesaid reply, the respondent-Bank has stated that the Forensic Audit Report has been attached with the letter, which is an annexure to the reply.

3 Learned Senior Counsel submitted that the procedure followed by the respondent-Bank was not proper because it has resulted in denial of adequate opportunity of hearing to the petitioner, as the Forensic Audit Report was required to have been supplied along with the show cause notice, which was not done and it was later on, vide letter dated 20.05.2025 (Annexure P-6) that the Forensic Audit Report was supplied and it was stated in the aforesaid letter that in case the petitioner required any personal hearing, the same may be intimated to the Bank within seven days. It was thereafter that when the petitioner was called for personal hearing, only five minutes were given to him for the personal hearing, which was not adequate, and therefore, there had been a violation of principles of natural justice in this regard. He submitted that considering the aforesaid denial of adequate hearing, the impugned order dated 05.01.2026 (Annexure P-1) is liable to be set aside.

On the other hand, learned counsel appearing on behalf of the respondent-Bank through video conferencing while referring to the reply filed by the respondent-Bank submitted that the submissions made by the learned Senior Counsel for the petitioner are against the record. In this regard, he submitted that although the initial show cause notice was issued on 22.11.2024 but on the basis of the reply filed by the petitioner, a specific letter was written to the petitioner vide Annexure P-6 dated 20.05.2025, wherein it was made very clear that the Forensic Audit Report has been attached. He further submitted that the respondent-Bank did not proceed hurriedly and rather, it was only after the aforesaid letter dated 20.05.2025 (Annexure P-6) was issued that the impugned order dated 05.01.2026 (Annexure P-1) was passed, i.e., after a gap of more than six months.

Learned counsel also submitted that adequate personal hearing was granted to the petitioner and the Forensic Audit Report was with the petitioner for more than six months. In this regard, he again referred to paragraph No.3 of the reply filed by the respondent-Bank and submitted that the record unequivocally demonstrates that the Forensic Audit Report was supplied to the petitioner on 20.05.2025 and the personal hearing was conducted nearly two months later i.e. on 18.07.2025 and that this period was more than adequate for any diligent person to prepare a comprehensive defence.

Learned counsel for the respondent-Bank, while further answering to the submission made by the learned Senior Counsel for the petitioner that only five minutes' hearing was granted, submitted that it has been specifically averred by the petitioner in paragraph No.21 of the present writ petition that the petitioner duly attended the personal hearing on 18.07.2025, which according to the petitioner was reduced to a pro forma exercise, where no documents were supplied and only five minutes were granted. To this, a reply has been filed by the respondent-Bank, in which to the aforesaid paragraph No.21 of the writ petition, it has been specifically denied and it has been specifically submitted by the respondent-Bank that it was totally wrong that only five minutes were granted and rather the petitioner has omitted to mention in the writ petition that the Committee had given further 15 days to submit documentary proof of his limited role, being an opportunity that he failed to avail. He submitted that therefore this is not a case where adequate opportunity of hearing was not granted to the petitioner and on this ground, the present writ petition is liable to be dismissed.

We have heard the learned counsels for the parties.

The only grievance of the learned Senior Counsel for the petitioner was that the petitioner was not granted an adequate opportunity of hearing after a show cause notice was issued to him, in pursuance of the Reserve Bank of India (Master Direction on Fraud Risk Management in Commercial Banks (including Regional Rural Banks) and All India Financial Institutions), 2024. The aforesaid show cause notice was issued to afford the petitioner an opportunity to show cause as to why he should not be declared a fraud. A perusal of the aforesaid show cause notice would show that the same was issued on 22.11.2024 and thereafter, a reply was also filed by the petitioner vide Annexure P-5 dated 13.12.2024. It was thereafter, on 20.05.2025, that the respondent-Bank issued a letter to the petitioner stating that the Forensic Audit Report has been attached with the aforesaid letter. After about six months, the impugned order has been passed.

The plea taken by the learned Senior Counsel for the petitioner that only five minutes' hearing was granted to the petitioner has been specifically denied by the respondent-Bank in its reply. Paragraph No.21 of the writ petition filed by the petitioner and paragraph No.21 of the reply filed by the respondent-Bank are reproduced as under:-

Learned Senior Counsel for the petitioner has referred to a judgment of Hon'ble Supreme Court in State Bank of India and others vs. Rajesh Aggarwal and others, Civil Appeal No.7300 of 2022, decided on 27.03.2023 and submitted that an adequate opportunity of hearing was required to be granted to the petitioner.

The judgment relied upon by the learned Senior Counsel for the petitioner in Rajesh Aggarwal's case (supra) is distinguishable on facts, whereas in the present case, we are of the considered view that adequate opportunity of hearing was granted to the petitioner.

We are of the considered view that although the Forensic Audit Report was not supplied along with the show cause notice but it was supplied along with the letter dated 20.05.2025 (Annexure P-6) and thereafter, the impugned order has been passed after about six months and in the meantime, adequate opportunity of personal hearing was granted to the petitioner, which is clear from paragraph No.21 of the reply, wherein it is stated that a further 15 days were granted thereafter as well.

We are, therefore, of the considered view that it is not a case where opportunity of hearing or any adequate opportunity of hearing was denied to the petitioner. It is also not a case where the respondent-Bank has proceeded in a hurried manner. We are, therefore, of the considered view that it cannot be said that due opportunity of hearing was not granted to the petitioner in accordance with law.

Consequently, finding no merit in the present writ petition, the same is hereby dismissed.