'Right To Live With Dignity Integral Part Of Any Human Being': Calcutta HC Sets Aside PNB's Complaint Against A Borrower

The Calcutta High Court has set aside a complaint filed by Punjab National Bank (PNB) against a borrower.

The Court noted that the complaint against one Vishambhar Saran (petitioner) originated from his designation as a wilful defaulter under the Reserve Bank of India's (RBI) Master Circular dated July 1, 2015. However, it noted that subsequently the circular was rescinded, rendering the complaint ineffectual.

The Bench of Justice Sabyasachi Bhattacharyya observed, “Moreover, the complaint being made clearly within the contemplation of Clause 4.2(ii) of the Master Circular dated July 1, 2015, read with Chapter VI of the RBI Master Direction dated July 1, 2016, has been rendered infructuous in view of the declarations of wilful defaulter and fraud having been recalled/set aside before even the registration of the FIR”.

Advocate Sabyasachi Choudhury appeared for the Petitioner and Senior Advocate Samrat Sen appeared for the Respondent/Bank (Punjab National Bank/PNB).

A complaint was filed against the Petitioner by Punjab National Bank (PNB) based on their declaration as a wilful defaulter under the RBI Master Circular. The Petitioner challenged the complaint and the subsequent FIR, arguing that the allegations were no longer valid due to subsequent events, including the revocation of their wilful defaulter status and the overturning of the fraudulent account declaration. The Respondent Bank, however, maintained the validity of the complaint and FIR, citing the ongoing CBI investigation and the allegations under the Indian Penal Code and the Prevention of Corruption Act.

​​Upon scrutiny of the 2021 complaint, the Court noted that the sole basis was the Petitioner's declaration as a wilful defaulter under the RBI's master circular. The grounds cited, including siphoning and diversion of funds and loss to public money, aligned with the RBI Master Circular on Wilful Defaulters.

Furthermore, the Court observed that the entire cheating allegation against the Petitioner hinged on the siphoning and diversion of funds, justifying the CBI's involvement under the RBI Master Direction, 2016. However, the Court also observed that the bank's complaint rested entirely on the now-withdrawn wilful defaulter.

The Court while emphasizing the cause of action, highlighted that the wilful defaulter declaration was revoked. Consequently, as of the FIR registration date none of the bank's allegations in the complaint held any validity.

The court also rejected the bank's contention that no legal right of the petitioner has been infringed.

"The right to live with dignity  is an integral part of any human being, enshrined and guaranteed by Article 21 of the Constitution of India. Equality before the law is another important aspect, guaranteed under Article 14 of the Constitution. The moment arbitrariness and/or mala fides is exhibited against a citizen of India, a contravention of Article 14 occurs as in the present case.", the court said.

Accordingly, the Court allowed the Petition and set aside the complaint lodged by PNB.

Cause Title: Vishambhar Saran v Punjab National Bank

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