STATE BANK OF INDIA versus M/S. JAH DEVELOPERS PVT. LTD. & ORS.

STATE BANK OF INDIA versus M/S. JAH DEVELOPERS PVT. LTD. & ORS.

In-house committees constituted under RBI Revised Circular dated 01.07.2015 are not tribunals and exercise administrative, not judicial, powers; therefore, no right exists under Section 30 of the Advocates Act to lawyer representation before such committees. However, given the severe consequences of being declared a...

Source-derived case information.

Parties
Appellant: State Bank of India; Respondent: M/s. Jah Developers Pvt. Ltd.; Respondent: Others
Jurisdiction
India
Judgment Date
08 May 2019
Procedural Posture
Civil Appeal / Final Judgment
Outcome
appeals allowed, impugned judgment set aside
Legal Topics
Wilful Default, Right to Legal Representation, Principles of Natural Justice
Banking Law Constitutional Law Wilful Default Right to Legal Representation Principles of Natural Justice

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Summary, issues, holding and outcome

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Parties

State Bank of India

Appellant

M/s. Jah Developers Pvt. Ltd.

Respondent

Others

Respondent

Procedural Posture

Civil Appeal / Final Judgment

Legal Issues

  1. 1 Whether a person declared wilful defaulter under RBI Circulars is entitled to be represented by a lawyer before such declaration.

Ratio Decidendi

In-house committees constituted under RBI Revised Circular dated 01.07.2015 are not tribunals and exercise administrative, not judicial, powers; therefore, no right exists under Section 30 of the Advocates Act to lawyer representation before such committees. However, given the severe consequences of being declared a wilful defaulter and impact on the fundamental right to carry on business under Article 19(1)(g), the Revised Circular must be interpreted reasonably to ensure borrowers receive the order of the First Committee, can make written representation within 15 days to the Review Committee, and must be served with a reasoned order thereafter.

Court Disposition

appeals allowed, impugned judgment set aside

Orders

  • Committee must provide order to borrower as soon as decision is made.
  • Borrower may make written representation within 15 days to Review Committee.