Bombay High Court grants interim stay on show cause notice issued to Naresh Goyal by IDBI Bank

economictimes.indiatimes.com:

Bombay High Court on Thursday temporarily stayed the show cause notice issued to Naresh Goyal, the erstwhile promoter of Jet Airways, and his wife Anita Goyal by IDBI Bank under the RBI’s master circular on wilful defaulters. The division bench of Justice GS Patel and Justice Dr Neela Gokhale stayed the show cause notice in an oral order and has allowed time for the lender to file its response.

Before that, Senior Advocates Milind Sathe and Abad Ponda appearing for the Goyals argued that the lender's move to declare a wilful defaulter was in violation of principles of natural justice. The counsels for Goyals also argued that the order was issued without granting a hearing.

The erstwhile promoter of Jet Airways filed the case on July 4 through Ameet Naik and Abhishek Kale of the law firm Naik Naik & Co. This is the second such relief for Naresh Goyal.

Recently on June 19, the court granted a stay till September 11 on the Reserve Bank of India (RBI) circular which empowered banks to declare any account ‘fraud’ without giving any hearing to its holders. Apart from IDBI Bank and the Reserve Bank of India (RBI), the petition also names Wilful Defaulter Identification Committee, Wilful Defaulter Review Committee, Credit Information Bureau (India) Ltd and Central Information Commission have also been named as respondents in the case.

“Respondent No 4 (Review Committee) failed to appreciate that it had sacrosanct responsibility under RBI master circular to independently verify the charges levied against the petitioner,” argued a writ filed by Goyal. “This is especially so considering the fact that the declaration of the petitioner as a wilful defaulter has wide and far-reaching consequences for the petitioner.” The petition