MAT/921/2025 of UNION BANK OF INDIA AND ORS Vs GUPTA POWER INFRASTRUCTURE PVT LTD AND ORS on 8 September 2026

1. The appeal arises out of an order dated February 25, 2025, passed in WPA 990 of 2025. By the order impugned, the learned Single Judge directed the Union Bank of India, Bhubaneswar, to supply relevant relied upon documents to the writ petitioners, before classifying their account as fraud.

2. Mr. Ghose, learned advocate for the appellant/bank, submits that the decision of the Hon’ble Apex Court in the matter of State Bank of India & ors. vs. Rajesh Agarwal & Ors., in Civil Appeal No.7300 of 2022, had been complied with by the appellant/bank. As Her Lordship had not directed affidavits to be filed, such fact and supporting documents could not be brought on record.

3. We find from the order impugned, that the declaration of fraud was set aside by Her Lordship on the ground of violation of principles of natural justice. Paragraph 3 of the order impugned records that the learned counsel for the respondent no. 1 (appellant herein) fairly submitted that no opportunity of hearing was given to the writ petitioners prior to declaration of fraud.

4. Her Lordship interpreted the decision of the Hon’ble Apex Court in Rajesh Agarwal (supra) and held that, although the master directions on fraud published by the Reserve Bank of India did not expressly provide that an opportunity of being heard should be given while proceeding with the declaration of fraud, but the principles of natural justice should be read into the same.

5. Accordingly, the impugned declaration of fraud was set aside.

6. The respondents were directed to take steps in accordance with law and in line with the decisions of the Hon’ble Apex Court in the matter of Rajesh Agarwal (supra).

7. The bank was directed to forward all necessary documents sought to be relied upon by the bank in the proceeding and also granted the writ petitioners an opportunity to place their case by filing supporting documents and by making oral submissions.

8. We do not find any illegality in the order impugned.

9. The principle of natural justice is enshrined in Article 14 of the Constitution of India. Denial of the principles of natural justice in any proceeding, amounts to arbitrariness and is antithetic to rule of law. The order passed by the bank visited the writ petitioners with civil consequences, and as such, they should have been given an opportunity of hearing before declaration of fraud.

10. We are of the view that, an opportunity of hearing and also an opportunity to controvert the documents sought to be relied upon by the bank in the proceeding for declaration of fraud, are sine qua non to the principle of audi alteram partem. Thus, we do not find any perversity in the order impugned.

11. As the respondent no. 1/company has gone into liquidation, it is represented by the resolution professional. Mr. Banerji and Mr. Saha represent the respondent Nos. 2 to 5.

12. We only modify the order impugned to the extent that, those documents already served upon the respondents, need not be served once again. However, those which have not been served, shall be served as per the direction of Her Lordship.

13. Accordingly, the appeal and the connected application being CAN 3 of 2026, are disposed of.

14. Parties are directed to act on the basis of the server copy of this order.

(Shampa Sarkar, J.)

(Arjun Ray Mukherjee, J.)