Whether the observations made in the Forensic Audit Report can be the sole basis for Bank to conclude an event of Wilful Default – Ratul Puri Vs. Punjab National Bank – Delhi High Court
Hon’ble Delhi High Court held that:
(i) The Forensic Audit Report can act as a piece of corroboration for the said exercise, but not the sole basis.
(ii) The lender banks must record their satisfaction of commission of Wilful Default which according to them are “intentional, deliberate and calculated”.
(iii) The line between persons who commit mere default in repayment of loan obligations and those who commit Wilful Default in terms of the Master Circular, would get obliterated.
(iv) A Forensic Audit Report, at best, is a piece of evidence in liquidation proceedings, and is in no manner a conclusive proof of any illegality committed under a law. The Forensic Audit Report is merely an opinion of the author, which is based on several disclaimers and it cannot be a conclusive proof of its observations.
(v) It would be unsafe if lender banks start to declare borrowers as Wilful Defaulter merely on the basis of observations made in the Forensic Audit Report without there being an independent application of mind.
(vi) The Master Circular is not to be invoked in every case of default but only when the default is Wilful Default as construed under the scheme of the Master Circular.
(vii) It is required to be ensured that solitary or isolated instances are not made the basis for imposing the penal action under the Master Circular.
(viii) Mere fact that an earlier CDR Scheme was finalised and nothing negative was flagged at that stage, may not come in way of the lender banks in invoking jurisdiction under the Master Circular.
