New Delhi [India], September 25 (ANI): The Bombay High Court has quashed the Bank of India’s decision declaring Jet Airways owner Naresh Goyal’s account as “fraud”.
The order issued by Justice R. I. Chagla has also quashed all consequent actions of having declared Goyal’s account as fraudulent, which includes reporting to any Central agency.
Goyal had moved a plea in the Bombay High Court, challenging Bank of India’s decision to classify Jet Airways’ borrower’s account owned by Naresh Goyal as fraudulent.
“Such classification is violative of the principles of natural justice and arbitrary, as it was done without giving Goyal any opportunity of being heard”, the pleas stated.
The plea also contends that the ‘fraud’ classification leads to restraining the borrower, Jet Airways and its former directors (including Goyal) from accessing institutional finance. It also jeopardises the future business prospects of both the company and its directors, the plea adds.
On December 30, 2024, the Bank of India issued a show-cause notice to Goyal, terming the Jet Airways account as fraudulent.
On 14 January 2025, Goyal submitted a reply to the first show-cause notice, denying the allegations and specifically requesting that the Bank provide all material relevant to the fraud declaration process, including the Forensic Audit Report (FAR) and its Addendum.
Goyal, in his reply, pointed out that the FAR dated 7 May 2020 had exonerated Jet Airways (JIL) and Goyal, finding no conclusive evidence of fraud.
Based on this, the Joint Lenders Forum had, in its meeting on 8 May 2020, decided not to take any action against Goyal.
Thus, Goyal had also sought a copy of the Competent Authority’s order/classification decision and minutes of any meeting that led to the reconsideration of JIL’s account despite the FAR’s findings. However, Goyal received no response from the Bank.
Over six months later, on 1 July 2025, the Bank issued a second show-cause notice, which was substantively identical to the first.
It cited the FAR dated 7 May 2020 and the Addendum FAR dated 10 February 2021 as the basis for classifying JIL’s account as fraud under the RBI Master Direction and provided these documents to Goyal for his response.
However, the Bank again failed to furnish the specific information earlier requested by Goyal in his letter dated 14 January 2025.
“By refusing their disclosure, while simultaneously relying upon them, Respondent No.1 (Bank of India) had deliberately withheld material documents and is acting in gross breach of natural justice and in direct violation of the statutory mandate contained under the 2024 Master Directions”, the plea argues.
Thus, Goyal, on the basis of the grounds mentioned above, sought the quashing of the ‘fraud’ declaration made by Bank of India.
The Court, after hearing submissions, quashed the said declaration and all consequent actions attached to the said declaration, including reporting to any investigating agency.
Senior Advocate Sharan Jagtiani and Advocate Pranjal Agarwal appeared for Naresh Goyal. Advocate Abhinav Chandrachud appeared for Bank of India. (ANI)
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