IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF JANUARY 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE WRIT PETITION NOs.31299-300 OF 2016 (GM-RES) BETWEEN:
1. M/S. REPRO INDIA LTD.
HAVING ITS REGISTERED OFFICE AT 11TH FLOOR, SUN PARADISE BUSINESS PLAZA B WING, SENAPATI BAPAT MARG LOWER PAREL, MUMBAI-400013 REP. BY ITS AUTHORIZED SIGNATORY MS. DIMPLE CHOPRA.
2. MR. MUKESH RAJNIKANT DHRUVE AGED ABOUT 56 YEARS SON OF RAJINIKANT DHRUVE AT 11TH FLOOR, SUN PARADISE BUSINESS PLAZA B WING, SENAPATI BAPAT MARG LOWER PAREL, MUMBAI-400013.
… PETITIONERS (By Ms. NIDHISHREE B.V. ADV.) AND:
1. M/S. CANBANK FACTORS LIMITED A COMPANY REGISTERED UNDER COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT NO.67/1, KANAKAPURA MAIN ROAD NEAR LALBAGH WEST GATE BASAVANAGUDI, BANGALORE-560004 REPRESENTED AT ITS DIRECTOR.
ALSO AT:
NO.21/22, REGENCY CHAMBERS NR. NANDI NATIONAL CINEMA NATIONAL LIBRARY ROAD BANDRA (W), MUMBAI-400050.
2. RESERVE BANK OF INDIA A CORPORATE BODY, CONSTITUTED UNDER THE RESERVE BANK OF INDIA ACT, 1934 10/3/8, NRUPATHUNGA ROAD BENGALURU-560001, INDIA.
REP. BY ITS AUTHORIZED SIGNATORY.
3. CREDIT INFORMATION BUREAU (INDIA) LIMITED A COMPANY REGISTERED UNDER COMPANIES ACT, 1956 WITH REGISTERED OFFICE AT HOECHST HOUSE, 6TH FLOOR 193 BACKBAY RECLAMATION NARIMAN POINT, MUMBAI-400021 REPRESENTED BY ITS DIRECTOR.
… RESPONDENTS (By Mr. HEMANTH RAO, ADV., FOR Mr. H.S. RUKKOJI, ADV., FOR R1 R2 & R3 SERVED AND UNREPRESENTED) - - -
THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE R-2 & 3 TO REMOVE THE NAME OF THE PETITIONER AS A WILLFUL DEFAULTER AND GRANT AN INTERIM ORDER TO DIRECT THE 3RD RESPONDENT TO STOP DISPLAYING THE NAME OF THE PETITIONER FROM ITS WEBSITE WHICH CLASSIFIES/DEPICTS THE PETITIONER AS A WILLFUL DEFAULTER AND ETC.
THESE WRIT PETITIONS COMING ON FOR ORDERS THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER Smt.Nidhishree B.V., learned counsel for the petitioner.
Mr.Hemanth Rao for Mr.H.S.Rukkoji, learned counsel for respondent No.1.
None for respondents 2 and 3.
2. The writ petitions are admitted for hearing.
With consent of the parties, the same are heard finally.
3. In these petitions under Article 226 of the Constitution of India, the petitioners have assailed the validity of the action of the respondent No.2 who is the Reserve Bank of India to reflect the name of the petitioners as willful defaulter.
4. When the matter is taken up today, learned counsel for the petitioners at the outset submitted that there is a commercial transaction between respondent No.1 and the petitioners. Thereafter, a dispute arose between the parties and the dispute was eventually referred for arbitration. On 30.01.2014, an arbitral award was passed in favour of the respondent No.1 to the tune of Rs.38,45,985/-. The petitioners thereafter have filed an arbitration suit in which the validity of the arbitral award passed in favour of respondent No.1 is under challenge on 31.05.2014. However, acting on the complaint submitted by respondent No.1, respondent No.3 has classified the petitioners as willful defaulters. It is further submitted that the aforesaid action has been taken in violation of the guidelines issued by RBI, which are categorical in nature and are binding on respondent no.3. It is also alleged that the impugned action is null and void. In the instant case, learned counsel for respondent No.3 has submitted that the Writ Petitions for respondent No.3 is not maintainable as well as for the reasons that Section 18 of the Credit Information Companies (Regulation) Act, 2005 the petitioners have an alternative remedy. Therefore, the Writ Petition should not be entertained.
5. I have considered the submissions made on both the sides. Admittedly the action against the petitioners on the basis of the complaint filed by respondent No.1. Admittedly, before classifying the petitioners as willful defaulters, neither any notice nor any opportunity of hearing has been afforded to the petitioners. Thus, the impugned action has been taken in flagrant violation of principles of natural justice. It is well settled in law that where an action is taken in flagrant violation of principles of natural justice, the doctrine of alternative remedy does not apply. In this connection a decision of the Supreme Court in ‘WHIRLPOOL CORPORATION vs. REGISTRAR OF TRADE UNION’, (1998) 8 SCC 1. The impugned action is taken against respondent No.3 on the basis of the Circular, which is issued by respondent No.2, which has a statutory force. Therefore, the principal relief is claimed against respondent No.3 in the petition. Sum and substance, the petitioner seeks enforcement of the Circular in this writ petition, which has been issued by respondent No.2 viz., RBI, which has a statutory force. The respondent Nos.2 and 3 are therefore directed to remove the name of the petitioners as willful defaulters. Needless to state that respondents 2 and 3 shall be at liberty to afford an opportunity of hearing to the petitioners as well as respondent No.1 and to pass fresh order in accordance with law.
Accordingly, the petitions are disposed of.
Sd/- JUDGE SS