The High Court in its recent order granted time to the company to put forth additional submissions to Union Bank’s review committee for a fair and just decision on the matter.
The bank’s review committee had declared PP Jewellers as a wilful defaulter in February this year.
Challenging the move on behalf of the company, advocate Vijay Aggarwal contended before the High Court that the said decision was violative of the principles of natural justice as the bank did not afford any opportunity to the company to make a representation before the committee.
Classification of a borrower as a wilful defaulter jeopardises the future of the business of the borrower and, therefore, the principles of natural justice necessitate giving an opportunity of a hearing before declaring the borrower as wilful defaulter, he argued.
Aggarwal also argued that PP Jewellers (Export) does not fall within the definition of ‘wilful defaulter’ as stipulated in the master circular issued by the Reserve Bank of India in 2015.He claimed the bank proceeded against the company pertaining to a mortgaged property which the bank had already taken possession in July 2016. Also, there was an unexplained delay of three years in sending the first show-cause notice, which is unjustifiable, the company argued.