New Delhi, March 11 The Delhi High Court has observed that it is incumbent on the part of a bank to supply the Forensic Audit Report (FAR) before classifying accounts as “fraud”.
A bench of Justice Manoj Jain was hearing a petition challenging the manner in which the accounts of petitioners were classified as “fraud” in January last year.
The petitioners contended that though the accounts have been classified as “fraud”, they were not supplied with FAR on the basis of which such accounts were classified as “fraud”.
Appearing on advance notice, the ICICI Bank admitted that FAR was not supplied to the petitioners and if directed, such a report would be supplied to the petitioners and after having their response, the Bank will further proceed with the matter in accordance with law.
Further, the respondent Bank submitted that they would ensure that the FAR dated September 23, 2020 and Addendum report dated January 21, 2021 are supplied within two weeks to all the petitioners and the latter would be at liberty to their send response, if any.
"In view of the above, since the Bank Accounts of the petitioners had classified as fraud, without them being provided with the Forensic Audit Report and its Addendum and since, it has now been undertaken by the learned counsel for Bank that these would be supplied within a period of two weeks from today, the order dated 05.01.2024 (classifying accounts as fraud) is hereby set aside,” ordered the Justice Jain-led Bench.
The Delhi High Court ordered that the FAR and its Addendum be supplied to the petitioners within two weeks and once the said reports are supplied, the petitioners would be at liberty to send a response, if any.
“Since the classification is based, essentially, on said report (FAR and and its Addendum), it was incumbent on the part of the bank to have supplied the same, in advance,” observed the Justice Jain-led Bench.
It clarified that the ICICI Bank would be at liberty to proceed further with the matter in accordance with law after considering the response of the petitioners.
Disposing of the plea, the Delhi HC said: "It will be also entirely up to the Bank to decide whether the petitioners need to be given any personal hearing before taking any final decision in the matter or not.”
Earlier, when the petitioners had knocked the doors of the Bombay High Court, their writ petition was disposed of on the limited point of jurisdiction but were granted liberty to file petition afresh before the appropriate court of jurisdiction.
Before the Bombay HC, the respondent Bank had submitted that it would have no objection to the jurisdiction, if the petition is, eventually, filed before the Delhi High Court.
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