Rajiv Gupta v. Union Bank Of India Ltd & ORS.

$~6 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 6767/2024 & CM APPL. 28207/2024 RAJIV GUPTA ....Petitioner Through:

Mr. Abhishek Garg, Adv. Mr. Yash Gaiha, Adv. Mr. Naman Mehta. Adv.

versus UNION BANK OF INDIA LTD & ORS.

.....Respondents Through:

Mr. Samarendra Kumar, Mr. Sandeep Soni, Mr. Vishnu Jaysaval, Mr. Adrash Raj Singh, Mr. Sumit Chanchal, Ms. Priyanka Singh, Advs. for R1

CORAM:

HON'BLE MR. JUSTICE JASMEET SINGH

O R D E R

% 21.01.2026 1.

This is a writ petition filed under Article 226 of the Constitution of India seeking the following reliefs:

"A) Issue appropriate writ in the nature of certiorari or directions/order quashing the Impugned Order dated 29.04.2024 issued by Respondent No. 1;

B) Issue appropriate writ in the nature of certiorari or directions/order to deem the Impugned Audit Report dated 16.08.2023 formulated by respondent no. 3 as non-est in the eyes of law as the same is arbitrary and without any authority of law;

C) Issue appropriate writ in the nature of mandamus or directions/order to stay the operation of Impugned Order and all the consequent proceedings arising out of the Impugned Order dated 29.04.2024 issued by Respondent No. 1 thereto; The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

D) Issue appropriate writ in the nature of mandamus or directions/order to stay the operation of Impugned Audit Report dated 16.08.2023 conducted by Respondent No. 3 and all consequential proceedings thereto;"

2.

The brief facts of the case are that the petitioner is a former Director of M/s RCI Industries and Technologies Ltd., engaged in the business of trade of copper and non-ferrous metals. The M/s RCI Industries and Technologies Ltd. availed loans from a consortium of banks for the purpose of expansion but suffered losses and was declared a non-performing asset by the joint lenders forum between 2019 and 2020.

3.

Thereafter, between December 2023 and January 2024, the banks participating in the joint lenders meeting issued show cause notices relying on the audit report, proposing to declare the account of M/s RCI Industries and Technologies Ltd. and the petitioner as fraud. Consequently, the petitioner was declared as fraud vide order dated 29.04.2024. 4.

The petitioner in the present petition challenges the impugned Order dated 29.04.2024 issued by the respondent No. 1. 5.

The relevant portion of the response by the petitioner dated 28.12.2023 reads as under;

"We trust that you will find the above explanations and answers in order and in complete satisfaction to all your queries. I would like to be heard in person or through authorized person if the bank is still having any queries."

6.

Mr. Garg, learned counsel for the petitioner, states that the petitioner has not been given an opportunity to submit its case in a personal hearing and The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

the documents as sought by the petitioner have also not been supplied. 7.

The Hon'ble Supreme Court in paragraph 98.6 of the judgment titled as State Bank of India and Others vs. Rajesh Agarwal and Others (2023) 6 SCC 1 has observed that the Principles of Natural Justice demand that the borrowers must be given an opportunity of hearing before classifying their accounts as fraud and the same must be done by a speaking order. The relevant paragraph reads as under:

"98.6. The principles of natural justice demand that the borrowers must be served a notice, given an opportunity to explain the conclusions of the forensic audit report, and be allowed to represent by the banks/JLF before their account is classified as fraud under the Master Directions on Frauds. In addition, the decision classifying the borrower's account as fraudulent must be made by a reasoned order." 8.

Since the declaration of fraud is an action with serious consequences, I am of the view that the principles of natural justice must be strictly followed. 9.

With the consent of the parties, it is directed that the petitioner/his authorized agent shall appear before the Review Committee at Konnectus Building, 6th Floor, Tower - 2, Unit No. 602-A, Opp. New Delhi Railway Station, Ajmeri gate side, New Delhi - 110002 on 16.03.2026 at 11:30 a.m. 10.

One week from today, the petitioner shall furnish a list of relevant documents which he seeks from the respondent No.1, and if available with the respondent, the same shall be supplied to the petitioner within one week thereafter.

11.

I am of the view that in compliance with the Principles of Natural Justice in letter and spirit, the Review Committee shall afford a personal The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

hearing and thereafter pass a reasoned Order. 12.

Consequently, the impugned Order dated 29.04.2024 is hereby set aside.

13.

The Court has not restricted the respondent from taking any actions that are available to the respondent in accordance with law and as per the judgments of this Court.

14.

The petition is disposed of in the aforesaid terms along with pending applications, if any.

JASMEET SINGH, J JANUARY 21, 2026/AS The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.