1. These three Petitions challenge show cause notices dated 3 September, 2016 issued to the Petitioners by Respondent Nos. 1 and 2. The impugned show cause notices called upon the Petitioners to show cause why the Petitioners should not be declared willful defaulters in terms of Reserve Bank of India's master Circular dated 1 July, 2015. This was in view of the failure of the Petitioners to repay the loans and yet dispose of the assets/receivables which were hypothecated to Respondent No. 1-Company.
2. We were not inclined to entertain the Petitions at the stage of show cause as the Petitioners could respond to the same, attend the hearing and have the grievances addressed.
3. However, the grievance of the Petitioners is that the manner in which the adjudication of show cause notices is taking place i.e. they have no opportunity to properly respond to the same. Thus resulting in gross injustice. This in view of the evidence/documents in support of the impugned notice not being furnished and legal representation not being permitted.
4. The Respondents contend that the documents which are being relied upon will be made available at the hearing. Further, it is submitted that in view of the decision of this Court in Kingfisher Airlines Ltd. v. Union of India 2016 (2) Mh.L.J. 838, the Petitioners are not entitled as a matter of right to be represented by an Advocate.
5. For a fair opportunity of hearing, the evidence in support of the impugned notices must be furnished to the persons called upon to show cause either with the notice or at least before the date of furnishing its reply/representation/hearing. So far as the decision of this Court in Kingfisher Airlines Ltd. (supra) is concerned, the same only provides that in proceedings such as these, a borrower does not have a right to be represented by an Advocate. It is pertinent to note that in Kingfisher Airlines Ltd. (supra), an Advocate was permitted to appear. Be that as it may, even if there is no right in the borrower to be represented by the Advocate, yet it would depend upon the facts of each case. Therefore, the Petitioner-borrower would be entitled to make out a case for representation by an Advocate before the Identification Committee i.e. authority to adjudicate/decide upon the impugned notice.
6. Therefore, in the present facts, at this stage, we are not dismissing the Petitions, as there appears to be some substance in the apprehension on the part of the Petitioner.
7. Therefore, after hearing the parties and on the basis of a broad consensus amongst the parties, the following directions are given to the parties:—
(I) Respondent No. 1 to furnish to the Petitioners all the documents, material or other evidence pertaining to the Show Cause Notice dated 3 September 2016 or addendum/clarification, if any, thereto, on or before 28 September 2016.
(II) The Petitioners may file their written submissions/objections, if any, to the Show Cause Notice on or before 19 October 2016.
(III) The Respondents shall not insist on the personal presence of any of the Petitioners at the hearing.
(IV) The Petitioners may make an application before Respondent No. 2 for leave to permit their Advocates to make oral submissions before Respondent No. 2. The said application shall state reasons as to why Advocates should be permitted to make oral submissions before Respondent No. 2.
(V) Respondent No. 2 will consider such application in accordance with law and communicate to the concerned Petitioner/s the outcome of such application.
(VI) Respondent No. 2 may thereafter proceed with the Show Cause proceedings. However, no final order shall be passed by Respondent No. 2 till disposal of the captioned writ petitions or without further orders passed by this court.
(VII) The personal hearing, if any, shall be fixed by giving at least seven days' notice in advance.
8. We adjourn the petition to 24 November 2016. In the meantime, Respondent No. 1 shall file its affidavit in reply to the writ petitions within two weeks from today. The Petitioners to file their rejoinder, if any, within one week thereafter.
9. This order by way of an interim directions is passed without prejudice to the rights and contentions of the parties.
10. Writ Petitions to be listed on board for admission on 24 November 2016. Parties are put to notice that the matters may be disposed of at the admission stage itself.
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