IN THE HIGH COURT AT CALCUTTA

(Constitutional Writ Jurisdiction)

APPELLATE SIDE

Present:

The Hon’ble Justice Krishna Rao

W.P.A. No. 978 of 2026

Monoranjan Roy

Vs.

SBI Stressed Assets Resolution Group & Ors.

Mr. Joydip Kar, Sr. Adv.

Mr. Rudraman Bhattacharyya, Sr. Adv.

Mr. Biswaroop Bhattacharyya

Mr. Niladri Bhattacharjee

Mr. Subhrojyoti Mukherjee

Ms. Deblina Chattaraj

Mr. Sayan Banerjee

Mr. Suman Majumdar

Mr. Shraman Mukherjee

....For the petitioner.

Mr. Anirban Pramanick

Mr. Punarbasu Nath

Ms. Bhagyasree Dey

….For the SBI.

Mr. Aman Agarwal

Mr. Debabrata Das

Mr. Arunabha Sarkar

2

Mr. Pratick Acharjee

….For the RBI.

Hearing Concluded On : 16.06.2026

Judgment Delivered On : 02.07.2026

Judgment Uploaded On : 02.07.2026

Krishna Rao, J.:

1. The petitioner has filed the present writ petition challenging the Show

Cause Notice dated 2

nd

December, 2025, wherein the bank has directed

the petitioner to show cause within 21 days as to why the account of

the petitioner should not be categorized and reported as fraud as per

the Reserve Bank of India (hereinafter referred to as “RBI”) Guidelines.

2. Mr. Joydip Kar, Learned Senior Advocate along with Mr. Rudraman

Bhattacharyya, Learned Senior Advocate representing the petitioner

submits that the bank has issued the show cause notice on the basis of

the Forensic Audit report but the Forensic Audit report is not

conclusive and the Auditor has mentioned in the report that the report

has been prepared solely for the purpose of providing selected

information on a confidential basis to which it is issued and should not

be used for any other purpose without their consent.

3. Mr. Kar submits that initially on 18

th

November, 2025, the respondent

no. 2 has issued show cause notice to the petitioner with respect to the

transactions from 1

st April, 2013 to 31

st March, 2018, on the basis of

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the Forensic Audit report dated 4

th June, 2025. On receipt of the said

notice, the petitioner has submitted a detailed reply on 29

th November,

2025, stating that the M/s. Pincon Spirit Limited (hereinafter referred

to as “PSL”) had been conducting its business activities with due

diligence, integrity and best efforts. It was informed to the bank that

the petitioner and other Directors of PSL had been arrested on 2

nd

November, 2017 and 19

th

April, 2018, respectively and all supporting

documents with regard to the operation of PSL and the petitioner has

been seized by the Directorate of Economic Offences (hereinafter

referred to as “DEO”). It was also informed that the offices and

production units of PSL along with business units of the

subsidiary/associate companies were sealed by the DEO in the month

of November/December, 2017, due to which it is not possible for the

petitioner to provide documents with regard to transactions of the

company.

4. Mr. Kar submits that it was also informed that the loan account of the

company has a long satisfactory credit standing with the consortium

member banks including the State Bank of India and the account of the

company turning into NPA is not due to intentional or willful and

malafide motive or default on the part of the management of the

company. He submits that due to stoppage of production at the

manufacturing units of Kolkata, the company’s revenue generation has

been adversely affected.

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5. Mr. Kar submits that the State Bank of India on 2

nd December, 2025,

issued a letter withdrawing the earlier show cause notice dated 18

th

November, 2025 and issued the impugned show cause notice though

the contents are identical to the show cause notice dated 18

th

November, 2025. He submits that the reasons and grounds for

withdrawal of the earlier show cause notice was not informed to the

petitioner.

6. Mr. Kar submits that by a communication dated 11

th

January, 2018,

issued by the SBI, IFB, Bangalore addressed to the Deputy

Superintendent of Police of the Office of the DEO, Kolkata informed that

the consortium banks have lent to the company after completion of due

diligence on the company and its promoters as per the bank’s/RBI

guidelines. He further submits that the consortium banks had itself

acknowledged the bona-fide and due diligence of the company and

thereafter had also acknowledged the plight of the company due to

stoppage of production at the manufacturing units at Kolkata which

resulted in non-servicing of loans, thus the show cause notices dated

18

th

November, 2025 and 2

nd

December, 2025, is contrary to their own

statement.

7. Mr. Kar submits that during the consortium meeting held on 31

st

January, 2018, the DEO, West Bengal has seized the stocks at the

plants of the company, despite such reports, no action was taken by

the State Bank of India or any other member bank of the consortium

against the DEO, West Bengal for safeguarding the stocks which were

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hypothecated to the consortium as prime security. He submits that the

company has been impleaded in a number of litigations with reference

to its operation. The alleged corporate debtors have also initiated

Corporation Insolvency Resolution Process (CIRP) against the company

before the National Company Law Tribunal, Kolkata. The said

application was taken up for consideration on 30

th September, 2019,

along with other applications wherein it is mentioned that the DEO,

West Bengal had attached the property of the corporate debtor (PSL) as

if it is the proceed of crime under the provisions of West Bengal

Protection of Interests of Depositors in Financial Establishment Act,

2013.

8. Mr. Kar submits that the Tribunal by its order dated 19

th February,

2020, observed that the contention that the assets attached by the

respondent therein are assets obtained by the corporate debtor

company out of the funds collected illegally by the group company

under the contrail of Pincon Groups seems to be devoid of any merit in

the absence of any supporting evidence and materials. The Tribunal

also observed that the property of the corporate debtor attached by the

respondent is liable to be detached and as such the DEO was directed

to detach the property vide notice dated 16

th

April, 2018 and to restore

possession thereof to the liquidator.

9. Mr. Kar submits that on perusal of the Forensic Audit report, it reveals

that the said report has been prepared in the absence of all necessary

documents and evidences. He submits that Forensic Audit report is an

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incomplete document and the same cannot be the basis of issuance of

the show cause notice. He further submits that the show cause notice

is issued in violation of principles of natural justice.

10. Mr. Kar in support of his submissions relied upon the judgment in the

case of T. Takano Vs. Securities and Exchange Board of India and

Another reported in (2022) 8 SCC 162 and submits that a quasi-

judicial authority has a duty to disclose the material that has been

relied upon at the stage of adjudication. An ipse dixit of the authority

that it has not relied on certain material would not exempt it of its

liability to disclose such materials if it is relevant to and has a nexus to

the action that is taken by the authority.

11. Mr. Kar further relied upon the judgment in the case of Milind Patel

Vs. Union Bank of India and Others reported in 2024 SCC OnLine

Bom 745 and submits that the purpose of disclosure of information is

not merely individualistic, that is to prevent errors in the verdict but is

also towards fulfilling the larger institutional purpose of fair trial and

transparency.

12. Mr. Anirban Pramanick, Learned Advocate representing the State Bank

of India submits that the show cause notice dated 18

th

November,

2025, was withdrawn and on 2

nd

December, 2025, another show cause

notice was issued detailing the allegation against the petitioner. In the

show cause notice, Forensic Audit report was enclosed, thus the

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petitioner cannot say that Forensic Audit report is not served upon the

petitioner.

13. Mr. Pramanick submits that the petitioner has submitted a detailed

reply to the show cause notice dated 18

th November, 2025. He has

referred to the paragraph 4(b)(c) and (e) and submits that all the issues

raised by the petitioner in the present writ petition is agitated in his

reply. In the said reply, the petitioner has not prayed for supply of any

documents.

14. Mr. Pramanick submits that the petitioner has submitted proposal for

One Time Settlement and on receipt of the proposal of One Time

Settlement, the bank requested the petitioner to submit the offer of One

Time Settlement to the Official Liquidator appointed by the Tribunal.

15. Mr. Pramanik submits that as per Master Directions on Fraud Risk

Management in commercial bank, reasonable time of 21 days was

provided to the petitioner for submission of his reply to the show cause

notice and only after receipt of notice, the bank shall consider the

request of the petitioner and after giving an opportunity to the

petitioner, the bank will consider whether the entities will be declared

as fraud or not. He submits that instead of waiting for the decision of

the bank, the petitioner has filed the instant writ petition, thus the writ

petition is not maintainable.

16. Mr. Pramanik in support of his submissions, has relied upon the

judgment in the case of Union of India and Another Vs. Kunisetty

8

Satyanarayana reported in (2006) 12 SCC 28 and submits that in

some very rare and exceptional cases, the High Court can quash a

show cause notice if it is found to be wholly without jurisdiction or for

some other reason if it is wholly illegal.

17. Initially the respondent bank has issued show cause notice to the

petitioner on 18

th

November, 2025 and the petitioner has submitted his

detailed reply to the same. On receipt of reply of the petitioner, the

bank without any order has withdrawn the said show cause notice, and

issued the impugned show cause notice on 2

nd

December, 2025. On

receipt of the impugned show cause notice, the petitioner has sent a

reply informing that the allegations made in the show cause notices

dated 2

nd December, 2025 and 18

th November, 2025, are same and the

petitioner has relied upon the reply submitted with respect to the show

cause notice dated 18

th November, 2025, with the option for resorting

legal action in any Court of law against such unilateral and biased

decision on the part of the bank.

18. The respondent bank has issued show cause notice to the petitioner on

the basis of the Forensic Audit report of R. Dokania and Company

dated 4

th

June, 2025. As per Forensic Audit report, the Bank has

appointed R. Dokania and Co., Chartered Accountants to conduct a

Forensic Audit of the books of accounts of the Borrower for a period

from 1

st

April, 2013 to 31

st

March, 2018. As per report, the

management of the Company were not reachable and due to which no

details of supporting documents have been received from the Borrower.

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19. In the report, it is mentioned that the Auditor has sent a request to the

Borrower for providing several details including Cash Book/ Bank Book

and Journal Book from the period 1

st April, 2013 to 31

st March, 2018,

Audited Financial Statements of Borrower for the said period and other

many information but the mail sent to the Borrower were not delivered

due to blockage issue. In the report, the Auditor has scanned the

message which shows that the request made by the Auditor to the PSL

has been blocked.

20. In the report, it is also mentioned that the Borrower has not provided

any document like books of accounts, transactions details, copy of

invoices, agreement entered into with various parties.

21. Conclusion and Disclaimer and Limitations of the Forensic Audit report

which reads as follows:

“CONCLUSION

Analysis of Management Comments

The borrower, Pincon Spirit Limited (PSL), has

categorically failed to provide any documentary

evidence or verifiable supporting documentation in

response to the observations raised during the forensic

audit. The stated reason for non-submission-seizure of

records by the Directorate of Economic Offences

(DEO)- does not absolve the company from the

responsibility of maintaining backups or duplicate

records.

As per standard accounting and statutory

compliance practices, listed companies are required to

maintain backups, digital records, audit trails, and file

statutory returns (e.g., GST returns, ROC filings) which

remain accessible through respective portals or backups.

No such attempt to produce secondary or

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corroborative evidence has been made by the

management.

The management response provides broad,

generic justifications about normal business

transactions but fails to address specific

transaction-level observations made in the forensic

audit. Statements such as "transactions were in the

ordinary course of business" or "accounting lapses were

inadvertent" are unsupported by verifiable facts or

documentation.

Despite the lapse of more than seven years, the

management has not pursued any legal remedy to

regain access to its own records from DEO, nor taken

steps to reconstruct the books of accounts - a minimum

expected effort from a listed entity. The continued

inaction indicates wilful negligence or a deliberate

attempt to avoid scrutiny.

The reply admits that operations have come to a

standstill, but fails to clarify the current status of

compliance with regulatory authorities like MCA,

SEBI, BSE/NSE, GST, or Income Tax. The absence of

updated filings or regulatory disclosures further adds to

concerns regarding the continuity and authenticity

of financial operations.

Conclusion on the basis of review of limited

documents made available to us by the

lenders

Further, we have received very limited documents

like bank statements, sanction letter, valuation report,

etc. for the purpose of conducting forensic audit of the

Borrower. The lenders have provided us with such

documents for our review.

We have reviewed the documents made available

to us by the lenders and have done proper web search

to identify the irregularities done by the Borrower. Our

investigation reveals multiple high-value, unjustifiable

financial transactions which are serious and prima facie

indicative of fraudulent intent, fund diversion and

deliberate misrepresentation on the part of the

Borrower. The following key findings underscore this

conclusion:

A) Payment to suspected shell entities

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The Borrower had made payment aggregating to

Rs. 27.03 crores to entities whose current status is

showing as 'Strike off” and has not filed the financial

statements since their incorporation or has not filed the

financial statements from last few years. Furthermore,

the directors of these entities are found to be common

across multiple ‘Strike Off’ entities, indicating a

deliberate creation of a web of shell companies to

facilitate fund diversion. The Borrower has failed to

produce any agreements, invoices, proof of delivery of

goods/services, or rationale justifying these payments.

The summary of payment done to such shell entities has

been shown below:

Sr.

No.

Name of the party Amount (Rs.)

1. Confitech Dealtrade Private Limited 1,57,49,517

2. Mayukh Commodities Private Limited 49,99,903

3. Polpik Traders Private Limited 2,49,82,522

4. Slice Trading India Private Limited 96,49,850

5. Jagwani Creations Private Limited 24,99,900

6. Gurpreet Sales Private Limited 54,99,937

7. Dhanganga Traders Pvt. Ltd. 42,49,893

8. Gajgamini Mercantile Pvt. Ltd. 1,33,24,878

9. Gajrup Markcom Pvt. Ltd. 24,99,870

10. Mahavir Tradimpex Pvt. Ltd. 74,99,815

11. Jai Santoshi Tradimpex Private

Limited

29,99,970

12. D L S Export Private Limited 8,13,49,300

13. Vaibhavlaxmi Distributors Private

Limited

7,00,18,884

14. Venera Property Private Limited 2,50,17,848

Total 27,03,42,087

Such payments without any visible economic

rationale or documentation and directed towards

non-operational, non-compliant and defunct

entities represent a classis typology of fund

12

siphoning and fraudulent activity conducted on

the part of the Borrower.

B) Questionable Payments to a Former Director:

It has been observed that the Borrower have paid

amount aggregating to Rs.40.00 lakhs to Mr. Raj Kumar

Roy within a period of 5 days. The summary of payment

made to him has been shown below:

Date Amount Paid

(Rs.)

Amount

Received (Rs.)

Remarks

15-09-2017 10,00,000 - HDFC Bank

15-09-2017 10,00,000 - HDFC Bank

18-09-2017 10,00,000 - HDFC Bank

18-09-2017 10,00,000 - HDFC Bank

Total 40,00,000 -

Mr. Raj Kumar Roy was a director of the

Company for the period 06.08.2011 – 06.03.2014.

No documentary justification or business rationale

has been provided for these payments. In light of

the Borrower's default and absence of

corresponding entries or documentation, these

transactions appear to be in violation of principles

of fiduciary responsibility and indicative of

unauthorized siphoning of funds.

C) Disproportionate Increase in Trade

Receivables vs. Trade Payables and lack of debtor

confirmations

It has been observed that the Borrower has

reported an aggregate increase of ₹17,703.06 lakhs in

trade receivables over the period from 01.04.2012 to

31.03.2017. In contrast, trade payables have increased

only by ₹8,284.38 lakhs during the same period. This

results in a significant mismatch between receivables

and payables growth, raising concerns regarding the

genuineness of the trade receivables reported in the

financial statements.

In view of the absence of adequate supporting

documents, lack of debtor confirmations, and non-

cooperation from the Borrower, it prima facie

13

appears that the trade receivables may have been

artificially inflated by the Borrower. This creates

a reasonable ground to suspect that funds may

have been diverted to non-genuine or related

parties under the guise of trade receivables, in

violation of fiduciary responsibilities and

applicable laws.

D) Payments to Entities Unrelated to the

Core Business

During the course of review, it was observed that

the Borrower made huge payments to multiple entities

during FY 2015-16 to FY 2017-18, whose line of

business and activities do not appear to have any direct

or indirect nexus with the Borrower's core operations.

These entities include Vinayak Research, Todi Investors,

RR Creations, HM Creations, Cellcom, Payal

Commodities, etc.

These entities, prima facie, appear to be engaged in

businesses such as investment advisory, commodity

trading, textile business and unrelated research

services which are not required in the normal course of

business of a liquor manufacturing company. This

pattern of payment, in the absence of business

rationale and supporting documentation, suggests

possible diversion of funds or accommodation

entries, and may fall under the ambit of

fraudulent transactions

E) Absence of Key Records & Obstruction in

Audit Process:

There are various suspicious transactions observed

by us which could not be completely unearthed due to

the absence of books of accounts. The Borrower has not

provided its statutory books of accounts, ledger records,

transactional invoices, agreements, etc. This non-

cooperation hinders the transparency and

traceability of financial conduct and itself raise

red flags under forensic and regular scrutiny.

FINAL OPINION

In view of the foregoing, it is our categorical

and professional opinion that the Borrower has

engaged in a well-orchestrated scheme of financial

misrepresentation, fraud and fund diversion,

14

through a network of shell entities and through

unauthorized individual payments, with the sole

intention of defrauding institutional lenders.

This conclusion is based on evidence available

as on the date of this report and is subject to

further findings upon production of the complete

financial records and cooperation by the

Borrower.

DISCLAIMER & LIMITATIONS

This report is to be read in totality, and not in

parts, in conjunction with the relevant documents

referred to in this report. While utmost care has been

taken in carrying out the assignment, there are certain

limitations of its use; our report is subject to the

following:

The scope of work is not equivalent to an audit

conducted in accordance with generally accepted

auditing standards, an examination of internal controls,

or other attestation or review services or services to

perform agreed upon procedures in accordance with the

standards established by The Institute of Chartered

Accountants of India.

Further, given the nature of the assignment, the

procedures followed may not comprehend all matters

relating to Company that might be pertinent or

necessary to the client's evaluation. Accordingly, though

we have carried out the work as per the scope of work

given, we make no representation to the sufficiency of

our procedures for the users. Our verification cannot be

relied upon to reveal all material issues (known and/or

unknown), which may have an impact on the opinion of

the Lender(s).

We did not independently verify all matters

discussed and consequently, we have relied on the

records and documents produced before us.

We have considered following key assumptions

while carrying out the assignment:

 Information and explanations and representation

received are materially correct.

15

 Documents such as bank statements, sanction

letters, etc. provided to us are Genuine.

No technical or economic viability study or market

survey was conducted for the purpose of this

assignment.

No responsibility is assumed for matters of a legal

nature. We were not required to carry out a legal

audit/review.

With respect to the documents and information

required for conducting forensic audit, we have mailed

our preliminary requirement list to the lenders and

borrower and have received very limited documents

which have been mentioned in the report.

We have carried out the audit based on the limited

information and explanations to the extent made

available to us by the lenders and from the sources

indicated elsewhere in this report.

Our firm shall by indemnified with respect to any

legal cost & expenses, if any required to be incurred by

us in this assignment due to any future litigations

against us by any party.

We have no obligation to update this report or

revise our opinion because of events or transactions

occurring subsequent to the date of this report.

This report has been prepared solely for the

purpose of providing selected information on a

confidential basis to which it is issued and should not

be used for any other purpose without our consent in

writing.

FOR

R DAKONIA & CO.

CHARTERED ACCOUNTANTS

Sandeep

Agarwal

SANDEEP AGARWAL

Dated: 04.06.2025

UDIN: 25064912BMMIIB9150.”

16

22. Directorate of Economic Offences, West Bengal, has initiated

investigation with regard to the transactional operation of the PSL and

seized the stocks and plants of the PSL. The DEO, filed an application

before the Tribunal being CA (IB) No. 577/KB/2019 and prayed for

dismissal of the CIRP proceeding initiated against the petitioner being

C.P. (IB )No. 93/KB/2018. The Learned Tribunal by an order dated 30

th

September, 2019, passed the following order:

“14. A very look at the name of the company

reveals that Sl. No. (e) (5th company) name is

Pincon Infrastructure Ltd. The Corporate Debtor

is Pincon Spirits Limited. The Corporate Debtor

company was Incorporated under the provisions of

the Companies Act, 1956 for carrying on business

of manufacturing, importing, exporting and

manufacturing of every kind of spirit. It has come

out in evidence that Corporate Debtor is not doing

any financial service business activities as alleged.

There is no material furnished before us to prove

that Corporate Debtor company is a chit fund

company or a financial service provider comes

under the purview of the 'WBPIDFE Act'. No

claimant also came forward claiming refund of

deposit if any deposited in the CD company. In the

absence of sufficient materials to prove that the

Corporate Debtor in any manner whatsoever come

within the scope of purview of 'WBPIDFE Act' we

are unable to hold that the proceedings initiated by

this Adjudicating Authority is illegal and improper.

23. The Resolution Professional though made

his efforts to get back the assets of the Corporate

Debtor from the 'DEO, WB', but he failed in having

any access to the books of account, without which

he could not verify the claim received from the

creditors and could not complete their valuation

because of the sole reason of non-cooperation of the

'DEO, WB' the inability of the Resolution

Professional in not getting a successful resolution

applicant cannot be faulted. Accordingly, we have

no other alternative other than to pass an order of

Liquidation.

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(j) CA (IB) Nos. 577/KB/2019 is dismissed

with cost of Rs.5 lacs payable within two

months from the date of receipt of the copy of

the order to the account of the CD either by e-

payment facility into bank account of the

corporate debtor or by way of DD, failing

which the Liquidator can realise the said

amount from the applicant in accordance

with applicable law.”

23. The Liquidator has filed an application before the Learned Tribunal

being CA (IB) No. 1741/KB/2018 for de-attachment of the assets of the

Corporate Debtor under Liquidation. Learned Tribunal by an order

dated 19

th

February, 2020, disposed of the said application by passing

the following order:

“9. From a reading of section 3 of ‘WBPIDFE

Act’, it appears to us that this provision is

inconsistent with section 14 of the I & B Code and

therefore, Section 14 as well as Sub Section (5) of

Section 33 of the Code will prevail over Section 3 of

‘WBPIDFE Act’. Therefore, it appears to us that all

the property of the Corporate Debtor attached by

the Respondent is liable to be de attached.

Accordingly, this application is allowed upon the

following among:-

O R D E R S

i. The Respondent Directorate of Economic

Offences, Government of West Bengal, is

hereby directed to de-attach all the properties

attached vide notice dated 16/04/2018 and

to restore possession thereof to the Liquidator

within 15 days of the receipt of the copy of

this order.

ii. CP (IB) No. 93/KB/2018 connected with

CA(IB) No.1741/KB/2018 is disposed of.

However, no order as to cost.”

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24. Admittedly, Corporate Insolvency Resolution Process (CIRP) is initiated

against the petitioner and Liquidator was appointed by the Learned

Tribunal. Once liquidation proceeding is started, the power of the Board

of Directors are suspended. The Liquidator is the sole custodian of the

company’s books of accounts, financial records and operational

documents. The Forensic Auditor must submit a formal requisition list

to the Liquidator specifying the exact financial years, ledgers and

transactions to be examined. The Liquidator compiles the available

documents and securely hands over to the Auditor. The Auditor may

examine or request clarifications directly from the suspended directors/

management, but all formal document exchanges must be routed

through or approved by the Liquidator to maintain the chain of

custody.

25. As per Forensic Audit report, the conclusion is based on evidence

available on the date of the report and is subject to further findings

upon production of the complete financial records and cooperation by

the borrowers. In the disclaimer portion of the Forensic Audit report, it

is mentioned that “this report has been prepared solely for the purpose

of providing selected information and on a confidential basis to which it

is issued and should not be used for any other purpose without the

consent of the auditor in writing”.

26. In the case of T. Takano (supra), it is held that:

“28.3. Transparency and accountability : The

investigative agencies and the judicial institution

are held accountable through transparency and not

19

opaqueness of proceedings. Opaqueness furthers a

culture of prejudice, bias, and impunity—principles

that are antithetical to transparency. It is of utmost

importance that in a country grounded in the Rule

of Law, the institutions adopt those procedures that

further the democratic principles of transparency

and accountability. The principles of fairness and

transparency of adjudicatory proceedings are the

cornerstones of the principle of open justice. This is

the reason why an adjudicatory authority is

required to record its reasons for every judgment or

order it passes. However, the duty to be

transparent in the adjudicatory process does not

begin and end at providing a reasoned order.

Keeping a party bereft of the information that

influenced the decision of an authority undertaking

an adjudicatory function also undermines the

transparency of the judicial process. It denies the

party concerned and the public at large the ability

to effectively scrutinise the decisions of the

authority since it creates an information

asymmetry.

30. It would be fundamentally contrary to the

principles of natural justice if the relevant part of

the investigation report which pertains to the

appellant is not disclosed. The appellant has to be

given a reasonable opportunity of hearing. The

requirement of a reasonable opportunity would

postulate that such material which has been and

has to be taken into account under Regulation 10

must be disclosed to the noticee. If the report of the

investigating authority under Regulation 9 has to

be considered by the Board before satisfaction is

arrived at on a possible violation of the regulations,

the principles of natural justice require due

disclosure of the report.”

27. The judgment relied by Mr. Pramanik in the case of Kunisetty

Satyanarayana (supra), it is settled law that writ jurisdiction is

discretionary jurisdiction and such discretion under Article 226 of the

Constitution of India should not be ordinarily exercised by quashing a

show cause notice but in the present case, the show cause notice is

20

issued on the basis of the Forensic Audit report and the Forensic Audit

report is not conclusive one as the documents of the borrower was not

available to the Auditor. Thus, the facts of the present case are

distinguishable from the facts of the case referred by Mr. Pramanik.

28. Considering the above, this Court finds that the Forensic Audit report

on the basis of which the impugned show cause notice is issued, is not

conclusive as the documents of the borrower was not available to the

Forensic Auditor and the same is categorically reflected in the Forensic

Audit report.

29. In view of the above, the impugned show cause notice dated 2

nd

December, 2025, is set aside and quashed. However, this order will not

prevent the respondent bank for taking appropriate steps against the

petitioner in accordance with law. It is further made it clear that if the

bank intending to rely upon the Forensic Audit report in future, the

bank may request the Auditor to obtain all the necessary documents

from the Liquidator appointed by the Learned Tribunal or from the

Directorate of Economic Offences to conduct Forensic Audit report to

come to a definite finding. The petitioner is also directed that, if any,

request is made by the auditor for supply of any documents and the

petitioner possesses the same, the petitioner shall forward the same

after being verified by the Liquidator in writing.

30. WPA No. 978 of 2026 is allowed.

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Parties shall be entitled to act on the basis of a server copy of the

Judgment placed on the official website of the Court.

Urgent Xerox certified photocopies of this judgment, if applied for,

be given to the parties upon compliance of the requisite formalities.

(Krishna Rao, J.)