1 2026:CGHC:21916 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 3757 of 2023 1 - Rashi Steel And Power Ltd. Through Its Wholetime Director Mr. Shiv Garg S/o Shri Ashok Kumar, Aged About 35 Years, Having Its Registered Office At Village Paraghat, Kotmi Sonar Road, Jairamnangar, Masturi District Bilaspur (C.G.) --- Petitioner versus 1 - Punjab National Bank Through Its Managing Director And C.E.O. Having Its Head Office At Plot No. 4, Sector 10, Dwarka, New Delhi 110075 2 - Indian Bank Through Its Managing Director And C.E.O. Having Its Office At 254-260, Avvai Shanmugam Salai, Royapettah, Chennai 600014 3 - Reserve Bank Of India Through Cgm-In-Charge And Secretary, Secretary's Department Reserve Bank Of India 16th Floor, Central Office Building Shahid Bhagat Singh Marg Mumbai- 400001 ---- Respondents For Petitioner : Mr. Vivek Chopda, Advocate For Respondent No.1 : Mr. Sharad Mishra, Advocate For Respondent No.3 : Ms. Annapurna Tiwari, Advocate Hon'ble Shri Justice Rakesh Mohan Pandey Order on Board 11.05.2026 1. The petitioner has filed this petition seeking the following relief(s):- “10.1 A writ and/or an order in the nature of appropriate writ do issue directing the respondent authority to remove account of the petitioner company as fraud under case no. (a) IBK20004-0055 and (b) PNB1903-0071 as the said declaration is illegal, arbitrary and against the principal of Natural Justice. 10.1A A writ and/or an order in the nature of appropriate writ do issue directing the respondent authority to produce before this Hon'ble Court all the records pertaining to the case of the petitioner with respect to initiation of fraud cases against the petitioner for the immediate perusal of this hon'ble Court. -2- 10.2 Any other relief which this Hon'ble Court may deem fit in the facts & circumstances of case. 10.3 Cost of the petition may also be awarded.” 2. Learned counsel appearing for the petitioner would submit that the petitioner Company availed term loans and cash credits from Punjab National Bank and Allahabad Bank(Indian Bank now) between year 2012-2016. The loans accounts of the petitioner were declared as Non-performing Assets in the month of October and November, 2016. The petitioner Company moved an application for restructuring the loans in the month of January, 2017 and such proposal was rejected by the Punjab National Bank in the month of March, 2018 and thereafter, a forensic audit was conducted in the month of October, 2018. Mr. Chopda would submit that the petitioner Company made a proposal of One-Time Settlement for Rs.50 crores against the total outstanding sum of Rs.143 crores on 28.05.2019 and said proposal was accepted on 03.02.2020. No dues certificates were issued by both the Banks on 10.12.2021 & 22.12.2021 and subsequently memorandum of satisfaction was also issued by the Registrar of Company on 17.01.2022. Mr. Chopda would contend that the petitioner Company has been put in fraud category by both the Banks vide communication dated 26.06.2024. Mr. Chopda would further contend that similar issue came up before the Hon’ble Supreme Court in the matter of State Bank of India and Others Vs. Rajesh Agarwal and Others, reported in 2023(6) SCC 1, wherein it is held that classification of an account as fraud not only results in reporting the crime but also has other penal and civil 3 consequence. He would submit that the Hon’ble Supreme Court has held that aggrieved person should be provided opportunity of hearing before taking such decision. He would submit that the petitioner may be permitted to make a detailed representation before respondents No.1 & 2 and the authorities concerned may be directed to take appropriate decision in light of the judgment passed in the matter of Rajesh Agarwal (supra) and clarified subsequently. 3. On the other hand, Mr. Mishra, learned counsel appearing for respondent No.1 would oppose the submissions made by Mr. Chopda. He would submit that the Hon’ble Supreme Court clarified the legal position in the matter of State Bank of India Vs. Amit Iron Private Limited and others, reported in 2026 Livelaw (SC) 337, wherein it is held that law laid down in the matter of Rajesh Agarwal(supra) did not recognize any right in favour of the borrower to a personal hearing from the Banks before classifying their accounts as a fraud account. He would contend that this petition deserves to be dismissed. 4. Ms. Annapurna Tiwari, learned counsel appearing for respondent No.3 would support the contentions made by Mr. Mishra. 5. Heard the learned counsel appearing for the parties and perused the documents placed on record. 6. Taking into consideration the above-discussed facts, particularly the observations made in the matter of Rajesh Agarwal(supra) and subsequently clarified in the matter of Amit Iron(supra), this petition, at this juncture, is disposed of reserving liberty in favour of -4- the petitioner to make a detailed representation before respondents No.1 & 2 and competent authorities are directed to decide representation so made by the petitioner keeping in mind the law laid down by the Hon’ble Supreme Court in the matter of Rajesh Agarwal(supra) and Amit Iron(supra) within a period of 90 days from the date of receipt of a copy of this order. 7. With the aforesaid observation(s)/direction(s), the present petition is disposed of. Sd/- (Rakesh Mohan Pandey) Judge Rekha