1 of 7 2-wp-3756-25 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 3756 OF 2025 Sanket Inder Shrikant ..Petitioner Versus 1. Bank of Baroda 2. Reserve Bank of India ..Respondents __________ Mr. Ravi Shekhar Pandey a/w. Rushikesh Dusane i/b. Agama Law Associates for Petitioner. Ms. Rithika Yerra i/b. Chittranjan Shah, Kay Legal & Associates LLP for Respondent No.1. Mr. Benny Joseph a/w. Mr. Abu Usama Shaikh, Riyan Adi Jijina and Siddhesh Kini i/b. BJ Law Offices LLP for Respondent No.2. __________ CORAM : SARANG V. KOTWAL & RANJITSINHA RAJA BHONSALE, JJ. DATE : 10 SEPTEMBER 2026 JUDGMENT : (PER SARANG V. KOTWAL, J.) 1. Rule. Rule is made returnable forthwith with consent of all the parties. 2. This petition is filed for directions to quash the show- cause notice dated 08.07.2021 and the orders dated 16.09.2021 and 09.11.2021. The result of the orders is that the Petitioner is Gokhale VINOD BHASKAR GOKHALE Digitally signed by VINOD BHASKAR GOKHALE Date: 2026.09.11 10:57:10 +0530 2 of 7 2-wp-3756-25 declared as a Wilful Defaulter by the Respondent No.1-Bank of Baroda. 3. Heard Mr. Ravi Shekhar Pandey, learned counsel for the Petitioner, Ms. Rithika Yerra, learned counsel for the Respondent No.1 and Mr. Benny Joseph, learned counsel for the Respondent No.2. 4. The case of the Petitioner is as follows: The Petitioner is a designated partner in Limited Liability Partnership (LLP) for Wannabe Foodies Hospitality LLP (hereinafter referred to as ‘WFH’). The said entity had applied to the Respondent No.1 for a Cash Credit Facility of Rs.30 lakhs under the Credit Guarantee Fund Scheme for Micro and Small enterprises. The petition mentions as to why WFH underwent financial distress. There are various reasons mentioned in the petition. One of the reasons was the acts of one Ram Karuturi. At this stage, we need not go to the details as to why the said entity underwent financial distress. We are considering the procedure adopted by the Respondent No.1-Bank in declaring the Petitioner 3 of 7 2-wp-3756-25 as a Wilful Defaulter. 5. Learned counsel for the Petitioner submitted and it is the case of the Petitioner that the Petitioner was never served with a show-cause notice which was the fundamental requirement in initiating the process of declaring any person as defaulter under the Circular dated 01.07.2014 (hereinafter referred to as ‘Master Circular) issued by the Respondent No.2-RBI. He submitted that the Petitioner was never served with not only the show-cause notice, but even the first order dated 16.09.2021 whereby he was declared as a Wilful Defaulter. He was only served with the order of the Review Committee dated 09.11.2021 which is annexed at Annexure-A to the present petition. Therefore, only and main contention raised by the Petitioner is violation of principles of natural justice and violation of the directions issued by the Respondent No.2-RBI in the said Master Circular. The Master Circular bears No. RBI/2014-15/73 DBR.No.CID.BC.57/20.16.003 /2014-15. 6. In response to the contentions raised by the learned 4 of 7 2-wp-3756-25 counsel for the Petitioner, the learned counsel for the Respondent No.1-Bank relied on the Affidavit in Reply filed in this case. It is the contention of the Respondent No.1 that the petition is filed belatedly and hence suffers from the vice of delay and latches. The impugned order is passed on 09.11.2021 and the petition is filed in the year 2025. As far as specific ground raised by the Petitioner that the show-cause notice and the order were not served is concerned, the reply refers to that ground to some extent in paragraph-18 of the reply which reads thus: “I say that the allegation that the Show Cause Notice dated 08.07.2021 and the Order of the Wilful Defaulter Committee dated 16.09.2021 were not served upon the Petitioner is false, misleading and denied. The said Show Cause Notice was duly issued and dispatched to the Petitioner at his address as per the Bank’s KYC records and was also communicated through official banking channels. The Petitioner cannot take advantage of alleged non-receipt when notices were dispatched in the ordinary course of business and no prejudice has been demonstrated. In any event, the Petitioner had sufficient knowledge of the proceedings and participated in subsequent correspondence, thereby curing any alleged defect of service.” 7. We have considered these submissions. The relevant guidelines in the Master Circular referred to herein above are 5 of 7 2-wp-3756-25 mentioned in paragraph-3 of the said Circular, and in particular, paragraph-3(b) is important; which reads thus: “3. Mechanism for identification of Wilful Defaulters (a) xxxx (b) If the Committee concludes that an event of wilful default has occurred, it shall issue a Show Cause Notice to the concerned borrower and the promoter/whole-time director and call for their submissions and after considering their submissions issue an order recording the fact of wilful default and the reasons for the same. An opportunity should be given to the borrower and the promoter/whole-time director for a personal hearing if the Committee feel such an opportunity is necessary.” 8. Thus, issuance of a show-cause notice and affording reasonable opportunity to the proposed defaulter is a very essential ingredient of the guidelines issued by the Respondent No.2-RBI. It is not a mere empty formality, but it has to be followed in spirit. 9. In the present matter, the reply of the Respondent No.1- bank does not specifically establish that the show-cause notice was served on the Petitioner and does not mention what steps were taken in that behalf. There is no reference to whether any paper 6 of 7 2-wp-3756-25 publication was actually made and if it was made, under what circumstances it was made. The reply does not establish that a show-cause notice was actually served on the Petitioner. Thus, in the present case, there is a clear violation of the principles of natural justice. On this ground alone, the impugned orders are required to be set aside. 10. Hence, the following order: O R D E R i) Rule is made absolute in terms of prayer clause (a); which reads thus: “a) Issue a writ of certiorari or any other appropriate writ, order or direction in nature of certiorari calling for the records and proceedings pertaining to the meetings and hearing carried out by the Wilful Defaulter Committee and the Wilful Defaulter Review Committee of Respondent No.1 and issue writ or pass directions quashing the Show Cause Notice dated 8th July 2021 and the Orders dated 16th September 2021 and 9th November 2021 along with all actions in pursuance thereof.” ii) The Respondent No.1-Bank of Baroda shall take all consequential steps since the impugned orders are set aside. 7 of 7 2-wp-3756-25 iii) It is further clarified that, if necessary, the Respondent No.1-Bank of Baroda can initiate fresh proceedings in the present subject matter after following due process of law. iv) The Petition is disposed of. (RANJITSINHA RAJA BHONSALE, J.) (SARANG V. KOTWAL, J.)