The principles of natural justice require a fair opportunity is provided to the aggrieved persons- Madras High Court

“If an aggrieved person contemplates a procedure of providing an opportunity before issuing a show cause notice ans such a procedure if accepted, would result in unnecessary complications as the show cause notice itself is a notice, providing an opportunity to the aggrieved person to submit their explanations/objections.” These were stated by the single bench of Honourable Mr. Justice S. M. Subramaniam in the case of Best & Crompton Engineering Project Limited v. The Corporation Bank (W.P.Nos.26640 to 26645 of 2014)

Following is crux of the case the petitioners are Best & Crompton Engineering Project Limited, Represented by its Managing Director, and its Board of Directors. The history as narrated in the affidavit regarding the formation and development of the Company may not require an adjudication in the present writ petitions as the order under challenge is the order passed by the respondent Corporation Bank, now amalgamated with the Union Bank of India, declaring the petitioners as ‘Wilful defaulters’.

The learned counsel for the petitioners mainly contended that the procedures followed for declaring the petitioners as ‘Wilful Defaulters’ are directly in violation of the Directives of the Hon’ble Supreme Court of India in the case of State Bank of India Vs Jah Developers Private Limited and Others, reported in (2019) 6 Supreme Court Cases 787. The learned counsel for the petitioners drew the attention of this Court with reference to the order impugned, which was issued by the Assistant General Manger as per the Directives of the Apex Court of India. The Assistant General Manager is not a competent authority and a decision must be taken by the Committee constituted by the Chairman and the General Managers and in the present case, such a procedure had not been followed and thus, the order impugned is in violation of the procedures as contemplated.

Here in the case Honourable Mr. Justice S. M. Subramaniam stated that this being the procedures, which all are undoubtedly in consonance with the principles of natural justice and in-between procedures cannot be suggested nor be followed by the authorities for the purpose of taking any undue advantage. The principles of natural justice require a fair opportunity is provided to the aggrieved persons. Once the procedures followed are fair and reasonable and the persons aggrieved are provided with an opportunity to represent their case, the said procedure would be sufficient to meet out the requirement of the principles of natural justice and further, opportunity or otherwise or contemplation of in-between procedures are uncalled for and such procedures will destroy the very decision making process and on some occasions, it will provide undue advantage to such defaulters for the purpose of escaping from the clutches of law. Thus, Courts would not approve such procedures, which all are unnecessary, and Court must ensure that a person aggrieved is provided with a fair and reasonable opportunity to represent their grievances and the grievances represented are considered by the competent authorities and reasons are furnished for taking a decision. When these basic requirements are complied with, then there is no reason to interfere with the processes adopted by the competent authorities.

In view of the facts and circumstances, the petitioners have not made out any acceptable ground for the purpose of interfering with the order impugned passed by the respondents and consequently, all the writ petitions stand dismissed. No costs. Consequently, connected miscellaneous petitions are closed.

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Judgement reviewed by Himanshu Ranjan

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