- (1.) The grievance of the present petitioners is that the Deputy General Manager of the respondent no.1/bank issued a notice calling upon the petitioners to show cause and make submissions in writing as to why the name of the petitioner no.1 should not be included in the list of wilful defaulters, as per RBI guidelines.
(2.) Learned senior counsel appearing for the petitioners submits that the Deputy General Manager did not have any authority to issue such a notice. It is submitted, on the strength of several judgments cited in Court today, that the Master Circular issued by the RBI in this context requires formation of a Wilful Defaulter's Committee by a bank, consisting of persons identified in such Master Circular.
(3.) Upon such Committee being constituted, the same is to meet to identify events of default. The Master Circular further requires the Committee to examine the evidence of wilful default. Upon examination of such evidence, if the Committee concludes that an event of wilful default has occurred, the Master Circular requires the committee to issue a show-cause notice calling upon the alleged defaulter to explain itself.;