Delhi High Court Quashed Decision To Declare Religare Finvest’s Account As ‘Fraud’

The Delhi High Court in the case Religare Finvest Limited v. State Bank Of India observed and has quashed the decision of State Bank of India, SBI declaring Religare Finvest’s account as ‘fraud’ and including it on the Central Fraud Registry of Reserve Bank of India, RBI.
The bench headed by Justice Purushaindra Kumar Kaurav in the case observed and has stated that the State Bank of India, SBI will be at liberty to take an appropriate action in accordance with law, if so necessitated.

The court in the case observed and has disposed of the petition moved by Religare Finvest Limited, RFL, who being the wholly-owned subsidiary of Religare Enterprises Ltd, REL, while challenging the decision of SBI’s.
In the present case, the petition was moved seeking removal of RFL’s name from the fraud list under the Central Fraud Registry which is constituted under the Reserve Bank of India, the Frauds Classification and Reporting by Commercial Banks and Select Fis Directions, 2016.

The counsel appearing for State Bank of India, SBI, on instructions, submitted before the court that the opportunity of hearing was not extended to RFL before its account was declared as fraud.
The said court was also informed by the parties that RFL’s account was settled and a no due certificate was issued to SBI.
The court stated that it is thus seen that in view of the principles laid down in the case of Rajesh Agarwal and Ors. (supra), wherein the impugned action of the respondent deserves to be set aside.

The court stated that the respondent’s action of declaring the petitioner’s account as fraud is hereby set aside.
However, the court stated that the respondent is at the liberty to take an appropriate action in accordance with law, if so necessitated.
Accordingly, the court dismissed the plea.