(MENAFN- IANS) New Delhi, March 3 (IANS) The Delhi High Court has overturned the decisions of the Bank of Baroda and Punjab National Bank declaring businessman Ratul Puri as a wilful defaulter under the Reserve Bank of India's Master Circular on Wilful Defaulters, 2015.
Puri, the Chairman of Hindustan Power Projects Private Limited, was labelled a wilful defaulter due to his association with Moser Baer Solar Limited, depriving him of credit facilities for his business ventures.
Justice Purushaindra Kumar Kaurav set aside the orders passed by the Bank of Baroda and Punjab National Bank's review committees, deeming them unsustainable.
The court ruled in favour of Puri, saying that the identification of a wilful defaulter should consider the borrower's overall track record, not isolated incidents.
The court stressed the importance of ensuring that penal actions under the Master Circular are not based solely on isolated transactions, but on a comprehensive assessment of the borrower's conduct.
It noted the banks' obligation to evaluate the entire track record of Moser Baer Solar Limited before concluding whether wilful default events occurred.
Justice Kaurav also noted the responsibility of the banks dealing with public funds to conduct thorough inquiries into borrowers' financial status and potential fraud.
The court said that if banks discover fraud or malfeasance, they must either refuse restructuring or impose stringent conditions.
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