Ratul Puri Vs State Bank of India & Anr. (Delhi High Court)
Summary: The Delhi High Court, in Ratul Puri Vs State Bank of India & Anr., disposed of a writ petition challenging the reporting and publication of the petitioner’s name as a wilful defaulter after the State Bank of India (SBI) confirmed that his name had been removed from the relevant records of TransUnion CIBIL Limited and undertook not to take further action against him pursuant to the Review Committee’s order dated 15 November 2022. Justice Purushaindra Kumar Kaurav considered the petitioner’s grievance that the bank had reported his name as a wilful defaulter without supplying the reasoned decision of the Review Committee. The petitioner contended that the action violated the applicable Reserve Bank of India (RBI) Master Circular and the principles recognised by the Supreme Court in Bank of India v. Jah Developers Pvt. Limited, (2019) 6 SCC 787. The proceedings principally concerned procedural fairness, communication of an adverse order and the consequences of reporting a borrower as a wilful defaulter.
The petition was filed under Articles 226 and 227 of the Constitution of India against SBI and TransUnion CIBIL Limited. The petitioner sought several directions, including deletion of his name from the published list of “Suit Filed Accounts – Wilful Defaulters Rs. 25 lacs and above as on 31-Jan-2023”, supply of the Review Committee’s order, restraint against its premature publication, quashing of the wilful defaulter classification proceedings, removal of adverse information from CIBIL’s database and restrictions against further reporting to the RBI, CIBIL or newspapers. According to the petitioner, SBI had furnished the adverse classification to CIBIL, resulting in publication of his name without first communicating the reasoned decision that was said to justify such action. These allegations formed the basis of the relief sought and were not separately adjudicated as findings of misconduct against the bank.
During an earlier hearing on 23 February 2023, the High Court directed SBI to clarify when the Review Committee had decided the petitioner’s representation. SBI informed the Court that the Committee had already taken its decision on 15 November 2022 but that a copy remained to be served upon the petitioner. The Court accordingly directed SBI to furnish the order and, in the meantime, to take steps to remove the petitioner’s name from the list of wilful defaulters. When the proceedings resumed on 27 February 2023, SBI was directed to file an affidavit. At the subsequent hearing on 3 March 2023, its senior counsel stated that steps for removal had been initiated but that the process required routing through the RBI, because of which the name had not yet been removed from the relevant list.
SBI thereafter filed a compliance affidavit stating that the petitioner’s name had been removed or deleted from the CIBIL website and that the relevant records reflected no data concerning him for the reporting dates of 30 November 2022, 31 December 2022, 31 January 2023 and 28 February 2023. On that basis, the High Court recorded that the principal relief seeking deletion of the petitioner’s name stood addressed. The petitioner, however, maintained that he remained entitled to receive the Review Committee’s adverse order. His senior counsel argued that whenever an adverse determination was made, it was required to be communicated to the affected person before consequences could lawfully follow. This contention concerned the continuing procedural significance of the Committee’s decision notwithstanding removal of the published classification.
On behalf of SBI, senior counsel expressly stated that the order dated 15 November 2022 was not being acted upon. The bank represented that all consequential action previously taken pursuant to that order had already been undone and that no further steps would be taken against the petitioner on its basis. SBI also did not dispute the petitioner’s legal submission that an adverse order should be served before adverse consequences follow. However, it contended that, because the bank had categorically decided not to act upon the Committee’s order, furnishing its copy was no longer necessary. The High Court recorded this position rather than undertaking a separate determination of the validity of the Committee’s decision or issuing a broader declaration concerning every possible circumstance in which such an order must be supplied.
The High Court accepted that no further directions were required in view of SBI’s categorical undertaking not to act on the Review Committee’s decision and not to take further steps against the petitioner. Consequently, the writ petition and pending applications were disposed of. The order is significant because it illustrates the practical importance of communicating adverse decisions and ensuring procedural fairness under the RBI’s wilful defaulter identification framework. However, its operative conclusion rested on SBI’s compliance and undertakings: the Court did not formally quash the Review Committee’s order, adjudicate the underlying allegations of wilful default or pronounce an unconditional rule that every unserved committee order is automatically void. The relief was resolved on the specific facts that the published entry had been removed and the bank had undertaken not to implement the adverse decision.
Cases Discussed
1. Bank of India v. Jah Developers Pvt. Limited (Supreme Court); (2019) 6 SCC 787. The petitioner relied upon this decision while contending that SBI’s reporting of his name as a wilful defaulter without supplying the Review Committee’s reasoned order violated the RBI Master Circular and procedural safeguards. The Delhi High Court recorded the reliance but disposed of the petition on the basis of SBI’s compliance and undertaking, without independently analysing the precedent. The decision is discussed in Judicial Restraint and RBI’s Wilful Defaulter Framework.
FULL TEXT OF THE JUDGMENT OF DELHI HIGH COURT
1. This petition under Article 226 read with 227 of the Constitution of India has been filed by the petitioner seeking following reliefs:-
“a. Issue a writ/ order/ direction in the nature of mandamus and/or any other appropriate writ! order/ direction of like nature directing the Respondent Nos. I and 2 to remove/ delete the name of the Petitioner appearing in the list of ‘Suit Filed Accounts – Wilful Defaulters Rs. 25 lacs and above as on 31-Jan-2023’ uploaded on the official website of Respondent No.2;
b. Issue a writ/ order/ direction in the nature of mandamus to Respondent No.1 to provide the Petitioner with the order (if any) passed by the Wilful Defaulter Review Committee;
c. Issue a writ/ order/ direction in the nature of mandamus to Respondent No.1 to refrain from putting the order (if any) of the Wilful Defaulter Review Committee in public domain for a period of 4 weeks after providing the same to the Petitioner;
d. Issue a writ/ order/ direction in the nature of mandamus and/or any other appropriate writ/ order/ direction of like nature quashing/ setting aside the entire action/ process/ proceedings of Respondent No.1 regarding declaration of Petitioner as a Wilful Defaulter;
e. Issue a writ in the nature of mandamus or any other appropriate writ of like nature directing the Respondent Nos. 1 & 2 to remove all incriminating and false information against the Petitioner from the database of Respondent No.2, which information has been shared at the behest of Respondent No.1 Bank;
f. Pass an order restraining the Respondent Nos. 1 and 2 and or / their servants, agents, assignees and officers and / or anyone claiming through or under them from publishing / reporting the name of the Petitioner to the Reserve Bank of India / Respondent No.2 (CIBIL) / newspapers and/ or giving any effect in furtherance of the act of Respondent No. 1 unlawfully reporting the name of Petitioner to the Respondent No.2 and publishing the same in the list of ‘Suit Filed Accounts – Wilful Defaulters Rs. 25 lacs and above as on 31-Jan;-2023’ uploaded on the official website of Respondent No.2, in any manner whatsoever.”
2. The brief facts of the instant case are that the respondent No.1-State Bank of India (SBI) had reported the name of the petitioner to the Credit Information Bureau of India Limited i.e. TransUnion Cibil Limited (Respondent No.2-CIBIL) as a wilful defaulter; and consequently the petitioner’s name appeared on the website of Respondent No.2-CIBIL. Learned counsel for the petitioner states that the aforesaid decision has been taken without providing a copy of the reasoned order of the Review Committee to the petitioner and hence, the respondent No.1-SBI is in gross violation of the mandate of the Master Circular of RBI and the decision of the Hon’ble Supreme Court in the case of Bank of India v. Jah Developers Pvt. Limited1.
3. This matter was taken up for hearing on 23.02.2023 and learned counsel appearing for respondent No.1-SBI was directed to apprise the court as to on which date, the order was passed by the Review Committee on the representation submitted by the petitioner.
4. Learned counsel appearing on behalf of respondent No.1-SBI, on instructions, submitted that the Review Committee had already decided the representation on 15.11.2022, however, he stated that the copy of the order was to be served on the petitioner. Accordingly, this court directed the respondent No.1- SBI to supply the copy of the order passed by the Review Committee and in the meantime, the respondent No.1-SBI was directed to take steps for removing the name of the petitioner from the concerned list of willful defaulters.
5. When the matter was taken up for hearing on 27.02.2023, the respondent No.1- SBI was directed to file an affidavit.
6. Thereafter, the matter was taken up on 03.03.2023 and the learned senior counsel who appeared on behalf of the respondent No.1- SBI stated that necessary steps have already been taken. Since, the same were required to be routed through Reserve Bank of India (RBI), therefore, the name of the petitioner was not removed from the concerned list of willful defaulters. However, an appropriate affidavit in that respect was directed to be filed.
7. The respondent No.1-SBI in its affidavit, in compliance of the order dated 23.02.2023, in paragraph 6 states that the name of the petitioner has been removed/ deleted from the website of respondent No.2-CIBIL and the data of the said respondent clearly reflects the aforesaid position. Paragraph No.6 of the compliance affidavit filed by respondent No.1-State Bank of India is reproduced as under:-
“6. In compliance of the order dated 23.02.2023 passed by this Hon’ble Court, the name of the petitioner has been removed/ deleted from the website of CIBIL as on 30.11.2022, 31.12.2022, 31.01.2023 and 28.02.2023 reflecting no data of the petitioner.
……”
8. In view of the aforesaid, it is seen that so far as the relief (a) of the relief clauses is concerned, the same stands mitigated.
9. Learned senior counsel appearing on behalf of the petitioner, however, states that the relief (b) of the relief clauses still needs to be adjudicated as in any case, once an adverse decision is taken against the petitioner by the Review Committee, the same needs to be served on the petitioner. He, therefore, states that even this court also in its first order directed the respondent No.1-SBI to supply a copy of the order dated 15.11.2022 to the petitioner to which learned senior counsel appearing on behalf of the petitioner also agreed.
10. At this stage, learned senior counsel appearing on behalf of respondent No.1-SBI states that the order dated 15.11.2022 is not being acted upon for various reasons. He, on instructions, states that firstly, the consequential action which was taken against the petitioner, pursuant to order dated 15.11.2022, has already been undone and secondly, no further steps would be taken against the petitioner in view of the order dated 15.11.2022. According to him, the legal submission which has been made by the petitioner that without service of the copy of the adverse order, no consequences should follow, is not disputed. He, therefore, states that, when the Bank has taken a categorical stand that the order dated 15.11.2022 is not being acted upon, copy thereof is not required to be supplied to the petitioner.
11. Since the respondent No.1-SBI has taken a stand not to act upon the order dated 15.11.2022, and has stated not to take any further steps against the petitioner, no further orders are necessary.
12. In view of the aforesaid, no further directions with respect to other prayers are required. Accordingly, the petition stands disposed of along with pending applications.
1 2019 (6) SCC 787. ↩
