Debangsu Basak, J. - (1.) The petitioners have assailed an order dated August 9, 2018 issued by the Regional Director of Reserve Bank of India (RBI) exercising powers under Section 45-IA of Reserve Bank of India Act, 1934.
(2.) Learned Senior Advocate appearing for the petitioners has submitted that, the impugned order is vitiated by breach of principles of natural justice. He has submitted that, the second proviso to Section 45- IA(6) of the Act of 1934 provides for an opportunity of hearing to be granted to the persons suffering the show-cause notice. In the present case, the petitioners received a show-cause notice dated May 10, 2018. The petitioners replied to such notice. It was alleged in the show-cause notice that, the first petitioner acted in violation of the Revised Regulatory Framework for Non-Banking Financial Companies (NBFC)(RBI/2014-2015/520 DNBR (PD) CC. No.024/03.10.001/2014- 15 read with Notification No. DNBR 007/CGM (CDS)-2015 dated March 27, 2015. He has submitted that, the notification dated March 27, 2015 required a NBFC to have Rs. 200 Lakhs as the Net Owned Fund (NOF) on or before April 1, 2017. The first petitioner could not generate the required NOF within the stipulated time. The petitioners prayed for condonation of such delay. The authorities did not afford the petitioners any hearing on the prayer for condonation. The authorities proceeded to cancel the Certificate of Registration issued in favour of the first petitioner for carrying on the business of non-banking financial institution under Section 45-IA of the Act of 1934. He has relied upon an unreported judgment and order dated January 29, 2019 passed by the High Court of Judicature of Madras in W.P. Nos. 18225, 21092, 21993 and 25143 of 2018, W.M.P. Nos. 21531, 24753, 25786, 29213 and 29214 of 2018 (M/s. Nahar Finance and Leasing Ltd. & Ors. v. The Regional Director, Reserve Bank of India & Ors.) and submitted that, the second proviso to Section 45-IA(6) of the Act of 1934 requires an oral hearing to be granted to the person suffering the show-cause notice. He has also relied upon the provisions of Section 45-IA(6) of the Act of 1934.
(3.) Learned Senior Advocate appearing for the petitioners has submitted that, the impugned order is non-speaking so far as the prayer for condonation of delay in compliance with the requirements prescribed under the notification dated March 27, 2015 is concerned. Such impugned order being non-speaking on such aspect, the same is in breach of the principles of natural justice as, the principles of natural justice requires a decision taken by an authority to be informed with reasons. According to him, the impugned order should be quashed.;