‘Willful defaults’ of parties under a derivative transaction with a bank are covered by RBI Master Circular

The court’s verdict on the proposition as summed up:

Held that counter parties of banks in derivatives transactions will fall within the purview of the Master Circular, and that banks could name them as willful defaulters (so long as they followed principles of natural justice.

The verdict , as observed, has been rendered by following / adopting the well known principle of ‘purposive’ (CONTEXTUAL) interpretation’.However, one is not quite clear on the finer point as to in what circumstances a ‘default’ in ‘payment or repayment’ could be rightly considered as ‘wilLful’. In other words,the doubt is this: Do the bracketed words, “so long as they followed principles of natural justice” are adequately clear so as to be of definitive guidance for courts to apply and follow the verdict, objectively,in all such or similar types of cases requiring adjudication in future.To put it differently, what precisely are the relevant “principles of natural justice” spoken of in the given context.

May be,the experts will be better equipped to clarify and elucidate!