Delhi HC sets aside bank’s order declaring bizman Ratul Puri as wilful defaulter

PTI, Mar 2, 2024, 5:39 PM IST

The Delhi High Court has set aside Bank of Baroda’s decision declaring businessman Ratul Puri as a wilful defaulter under Reserve Bank of India (RBI) guidelines.

The court said the forensic audit report did not verify the source of funds invested in the subsidiaries of Moser Baer India Ltd (MBIL), with which Puri was earlier associated, and the bank could not have issued show cause notice to the petitioner for wilful default without verifying the source of funds.

“Unless the funds that were invested were found to be borrowed funds, the respondent- bank did not have jurisdiction to invoke the Master Circular. The very genesis of ‘diversion’ or ‘siphoning of’ funds is dependent on the funds being borrowed funds,” Justice Purushaindra Kumar Kaurav said in a 92-page judgement passed on February 29.