A finding by Wilful Defaulter Committee (WDC) should not simply rely on a Transaction Audit Report (TAR), which unacceptable by the NCLT? – Ankit Bhuwalka Erstwhile Director of Bhuwalka Steel Industries Ltd. Vs. IDBI Bank Ltd. and Anr. – Bombay High Court
The Hon’ble Bombay High Court held that:
(i) It is safe to accept that the basis of issuance of the SCN was primarily the findings in the Transaction Audit Report (TAR), which were observed by the NCLT to be mere assumptions. Considering the grave consequences that follow a finding by the Wilful Defaulter Committee (WDC), the degree of proof required and expected to have been relied upon by the WDC should be much higher and not simply based on a TAR which itself was unacceptable to the NCLT.
(ii) Even if the Petitioner is presumed to have access to documents in the proceedings before the NCLT, he is justified in seeking documents in the conduct of WDC proceedings.
(iii) Article 19(1)(g) of the Constitution of India is attracted as the moment a person is declared as wilful defaulter. A Fundamental right under Article 19 or 21 can be enforced even against persons other than State or its instrumentalities.