HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT JAMMU WP(C) No. 2289/2025 CM No. 5278/2025 British International School …..Petitioner(s) Through: Mr. G. S. Thakur, Advocate. Vs Union of India & Ors. .…. Respondent(s) Through: Mr. Akash Gupta, Advocate for R-2 & 3. CORAM: HON’BLE MR. JUSTICE SANJAY DHAR, JUDGE ORDER 22.08.2025 1. The petitioner, through the medium of the present petition, has challenged the notice/communication dated 06.08.2025 issued by the respondent No. 3- Aditya Mahajan, Relationship Manager (LCU), Rail Head Complex, Panama Chowk, Jammu, by virtue of which the petitioner has been called upon to submit the documents for conducting the Forensic Audit of the petitioner school. 2. As per case of the petitioner, it had availed loan facility from the respondent No. 2-J&K Bank Ltd, Zonal Office Rail Head Complex, Panama Chowk, Jammu (for short, the ‘bank’), against the collateral security by way of equitable mortgage of land measuring 68 marls under Khasra No. 867 situated at Chowadhi, Jammu and mortgage of two plots of land measuring 08 marlas and Sr. No. 98 2 WP(C) No. 2289/2025 13 marlas falling under Khasra No. 302 situated at Chowadhi, Jammu. 3. According to the petitioner there is no overdue in respect of this loan account. It has been further submitted that a notice was issued by the respondent- bank to the petitioner under Section 13 of the SARFESI Act, which was challenged by the petitioner before the Court and the petition came to be disposed of by directing the petitioner to deposit overdue amount by or before 31.03.2025. Accordingly, the petitioner is stated to have deposited an amount of Rs. 50 lacs with the respondent-bank. 4. It has been submitted that respondent-bank had wrongly classified the account of the petitioner as ‘Non- Performing Asset’ in violation of the relevant norms. It has been further submitted that in terms of directions passed by this Court in other writ petition, the petitioner has already deposited the overdue payment alongwith charges by 25.05.2025 but account of the petitioner was not upgraded to standard for reasons best known to the respondents. It has been submitted that instead, impugned communication has been issued by the respondents whereby the petitioner has been asked to furnish certain documents for the purpose of conducting Forensic Audit. 3 WP(C) No. 2289/2025 5. The petitioner has challenged the impugned communication on the grounds that the same has been issued without any reason and without any basis. It has been submitted that Forensic Audit is undertaken only in circumstances when there is some fraud but in the instant case, no such situation is prevailing. 6. It has been further contended that there is no default on the part of the petitioner and the impugned communication does not spell out the fraud, misappropriation, inaccuracy, financial crime, bribery or conflicts of interest, as such, Forensic Audit could not have been undertaken against the petitioner. It has been contended that by issuing the impugned notice/communication, the fundamental right guaranteed to the petitioner under Article 14 of the Constitution of India has been violated. 7. Issue notice to the respondent Nos. 2 and 3. 8. Mr. Akash Gupta, learned Advocate enters appearance on behalf of the respondent Nos. 2 and 3. 9. I have heard learned counsel for the parties and perused record of the case. 10. A perusal of the impugned communication reveals that respondent No. 3 has informed the petitioner that Forensic Audit of the petitioner’s school has been 4 WP(C) No. 2289/2025 allotted to an independent auditor, who has sought certain information/documents. Accordingly, the petitioner has been asked to furnish these documents. 11. The contention of the petitioner is that conducting Forensic Audit would amount to violation of its right to privacy and the loan account of the petitioner being upgraded to standard, there was no reason for the respondents to issue the impugned communication and undertaking Forensic Audit. It has been contended by learned counsel for the petitioner that a prior notice was required to be given by the respondent-bank to the petitioner before resorting to Forensic Audit. 12. A perusal of the impugned communication would reveal that documents/information which have been sought from the petitioner are not of such a nature as would amount to intruding in the privacy of the school. The petitioner claims that its loan account has been upgraded as standard whereas learned counsel for the respondents has submitted that recently the loan account of the petitioner has turned ‘Non-Performing Asset’. 13. Be that as it may, the impugned communication does not in any manner either violate the right of the privacy of the petitioner’s school and it does not infringe its any other right. It is only a notice seeking certain 5 WP(C) No. 2289/2025 information and documents from the petitioner for the purpose of conducting Forensic Audit. The respondent- bank has yet to take a decision whether the loan account of the petitioner can be termed as fraudulent. The said decision can be taken by the respondent-bank only after conducting the Forensic Audit but before taking such a decision on the basis of the report of the Forensic Audit, the respondent-bank may have to issue a show-cause notice to the petitioner. However, that stage is yet to arrive. 14. The Supreme Court in the case of “State Bank of India & Ors. v. Rajesh Agarwal & Ors.”, 2023 AIR (SC) 1859, has clearly held that principles of natural justice are to be followed while issuing notice to the borrowers so as to offer them an opportunity to explain the conclusions of the Forensic Audit report before their account is classified as fraud under the Master Directions on Fraud issued by Reserve Bank of India. 15. As already stated, the said stage is yet to arrive. The Forensic Audit is yet to be conducted and the report has not been received by the bank as yet. Therefore, at this stage, the petitioner does not have a right of hearing. The contention of the learned counsel for the petitioner is, therefore, misconceived. The writ petition appears to be premature. 6 WP(C) No. 2289/2025 16. For the foregoing reasons, I do not find any merit in this petition at this stage. The same is accordingly, dismissed. (SANJAY DHAR) JUDGE JAMMU 22.08.2025 SUNIL Whether the order is speaking : Yes Whether the order is reportable : No