Case Law Details
Amit Dineshchandra Patel Vs Reserve Bank of India (Gujarat High Court)
The Gujarat High Court’s judgment in the case of Amit Dineshchandra Patel Vs Reserve Bank of India represents a pivotal moment in the jurisprudence surrounding banking fraud in India. This judgment underlines the necessity of adhering to the principles of natural justice, particularly the rule of audi alteram partem, before a borrower’s account is classified as fraudulent by lending institutions.
Summary of the Case:
The petitioners, associated with M/s Syntex Industries Limited, challenged the decision of respondent banks, taken during a Joint Lenders Meeting, to declare the company’s account as fraudulent. This action was taken following the discovery of discrepancies in the company’s financial statements for the fiscal years 2014-15, 2015-16, and 2016-17, specifically concerning the partial or non-recognition of interest costs on borrowings deemed as Non-Performing Assets (NPAs) by the banks.
Key Points from the Judgment:
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