[2026:RJ-JP:7299] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Civil Writ Petition No. 14776/2025 1. M/s. Shree H. S. Industries, G-1-197, Brij Industrial Area, Bharatpur, Bharatpur, Rajasthan 321001, Through Its Partner Mr. Dharmendra Bansal. 2. Mr. Dharmendra Kumar Bansal Son Of Late Mr. Duli Chand Bansal, Resident Of Behind Chamber Of Commerce, New Mandi, Bharatpur, Partner M/s. Shree H. S. Industries. ----Petitioners Versus 1. State Bank Of India, Having Its Corporate Office At Nariman Point, Mumbai, Maharashtra And Fraud Monitoring Cell, Compliance And Risk Department, Local Head Office, Tilak Marg, C-Scheme, Jaipur 302005, Through Its Assistant General Manager. 2. Reserve Bank Of India, Through Its Regional Director, Rambagh Circle, Tonk Road, Jaipur - 302004. 3. Central Bureau Of Investigation, Having Its Office At 1, Tilak Marg, Jaipur, Rajasthan 302005 Through Its Director. ----Respondents Connected With S.B. Civil Writ Petition No. 14777/2025 1. M/s Shri Vajyanti Udhyog, A Proprietorship Concern, Having Its Registered Office At G-1-198, Brij Industrial Area, Bharatpur, Rajasthan 321001, Through Its Proprietor Smt Chanchal Bansal. 2. Mrs. Chanchal Bansal Wife Of Dharmendra Kumar Bansal, Resident Of Behind Chamber Of Commerce, New Mandi, Bharatpur, Proprietor M/s Shri Vajyatni Udhyog. ----Petitioners Versus 1. State Bank Of India, Having Its Corporate Office At Nariman Point, Mumbai, Maharashtra And Fraud Monitoring Cell, Compliance And Risk Department, Local Head Office, Tilak Marg, C-Scheme, Jaipur 302005, Through Its Assistant General Manager. [2026:RJ-JP:7299] (2 of 5) [CW-14776/2025] 2. Reserve Bank Of India, Through Its Regional Director, Rambagh Circle, Tonk Road, Jaipur 302004. 3. State Of Rajasthan, Through Home Department, Government Of Rajasthan, Wr32-Vx4, C Scheme, Ashok Nagar, Jaipur, Rajasthan 302007 Through Secretary. ----Respondents For Petitioner(s) : Mr. Mohit Khandelwal For Respondent(s) : Mr. Alok Garg with Ms. Swati Daga Mr. Sanjay Srivastava with Mr. Adeet Srivastava HON'BLE MR. JUSTICE ANUROOP SINGHI Order 16/02/2026 1. These writ petitions have been filed challenging the order dated 01.09.2025, vide which the loan account of the petitioners has been classified as “Fraud” and so also the show cause notice dated 01.08.2025 issued by respondent No.1 – State Bank of India. 2. Learned counsel for the petitioners submits that despite submission of the reply by them, the same was not at all considered, and more so a bare perusal of the impugned order dated 01.09.2025 reveals that the same has been passed without assigning any reason whatsoever and the same is verbatim reproduction of the show cause notice dated 01.08.2025. It is primarily on these grounds that the petitioners have sought quashing of the order dated 01.09.2025. 3. Mr. Alok Garg, learned counsel for the respondents vehemently submits that as no reply was filed by the petitioners within the given time, there was no occasion for the Bank to wait for the reply being filed by the petitioners and thus, the order [2026:RJ-JP:7299] (3 of 5) [CW-14776/2025] dated 01.09.2025 has been rightly passed. Hence, he prays that the writ petition deserves to be dismissed. 4. Heard learned counsel for the parties. 5. A bare perusal of the show cause notice dated 01.08.2025 and impugned order dated 01.09.2025 reveals that the impugned order dated 01.09.2025 is verbatim reproduction of the show cause notice dated 01.08.2025 and no reasoning whatsoever has been assigned by the respondents while passing the order dated 01.09.2025. Further, the factum of any reply being filed by the petitioners or not, or the reason for non-considering of any such reply has also not been stated in the impugned order, more so when it is a specific submission of the petitioners that reply was filed within the allotted time. 6. The judgment passed by the Hon’ble Supreme Court in the case of State Bank of India & Ors. Vs. Rajesh Agarwal & Ors.; (2023) 6 SCC 1 duly covers the controversy in hand and the directions issued therein are as under:- “98. The conclusions are summarized below: 98.1. No opportunity of being heard is required before an FIR is lodged and registered. 98.2. Classification of an account as fraud not only results in reporting the crime to investigating agencies, but also has other penal and civil consequences against the borrowers. 98.3. Debarring the borrowers from accessing institutional finance under Clause 8.12.1 of the Master Directions on Frauds results in serious civil consequences for the borrower. [2026:RJ-JP:7299] (4 of 5) [CW-14776/2025] 98.4. Such a debarment under Clause 8.12.1 of the Master Directions on Frauds is akin to blacklisting the borrowers for being untrustworthy and unworthy of credit by banks. This Court has consistently held that an opportunity of hearing ought to be provided before a person is blacklisted. 98.5. The application of audi alteram partem cannot be impliedly excluded under the Master Directions on Frauds. In view of the time frame contemplated under the Master Directions on Frauds as well as the nature of the procedure adopted, it is reasonably practicable for the lender banks to provide an opportunity of a hearing to the borrowers before classifying their account as fraud. 98.6. The principles of natural justice demand that the borrowers must be served a notice, given an opportunity to explain the conclusions of the forensic audit report, and be allowed to represent by the banks/ JLF before their account is classified as fraud under the Master Directions on Frauds. In addition, the decision classifying the borrower’s account as fraudulent must be made by a reasoned order. 98.7. Since the Master Directions on Frauds do not expressly provide an opportunity of hearing to the borrowers before classifying their account as fraud, audi alteram partem has to be read into the provisions of the directions to save them from the vice of arbitrariness.” 7. Thus, taking note of the above and without delving into the merits of the matter at this stage, impugned order dated 01.09.2025 vide which the loan account of the petitioner has been classified “Fraud” is quashed solely on the ground that it is a non- [2026:RJ-JP:7299] (5 of 5) [CW-14776/2025] speaking order, bereft of any reasons worth mentioning and is just a mere verbatim of the show cause notice. It is a settled principle of law that reasons are the heart and soul of every order as one of the indispensable requirement of natural justice is spelling out the reasons for which the order is made, as has been observed by the Hon’ble Supreme Court in Kranti Associates Private Limited and Anr. Vs. Masood Ahmed Khan and Ors., reported in (2010) 9 SCC 496. 8. However, considering the facts and circumstances as obtained, the reply as already submitted by the petitioners, the receipt of which is acknowledged by the respondents in their reply on 30.08.2025, be duly considered by the respondents more particularly, in light of the directions issued by the Hon’ble Supreme Court in the case of Rajesh Agarwal (supra) and only thereafter any decision on the show cause notice dated 01.08.2025 be passed. 9. With the aforesaid directions, these writ petitions are disposed of. 10. Accordingly, pending application(s), if any, stand disposed of. (ANUROOP SINGHI),J DANISH USMANI /179 & 180