Bombay HC Grants Interim Stay on IDBI Bank Show-cause Notice to Naresh Goyal

Mumbai: The Bombay High Court on Thursday granted interim stay on show cause notice issued to Jet Airways founder Naresh Goyal and his wife Anita Goyal by IDBI Bank under the Reserve Bank of India’s (RBI) Master Circular on Wilful Defaulter. 

A division bench of Justices Gautam Patel and Neela Gokhale was hearing a plea by the couple challenging the show cause notices, declaring them wilful defaulters.

IDBI failed to give documents: Goyal contends in court

Goyal contended that on receiving the show cause notice, he asked IDBI to show the list of documents relied on while declaring them wilful defaulters. However, they were not given the documents. Goyals argued that this violates principles of natural justice. The plea also added that the order was in derogation of the intent of the RBI Master Circular.

The plea read, “…the decision taken to classify a borrower as a wilful defaulter should be well documented and supported by requisite evidence. In the present case, neither of the impugned orders are based on documentary evidence and nor do they contain cogent reasons for declaring petitioner as wilful defaulter.” 

Naresh Goyal contended in his plea that he was appointed as a non-executive director and his role was to engage in brand building, hunting for talent and best human resources for the company and increasing the presence of the company in the international market. He further said that he was not involved in the day-to-day affairs or executive decisions of Jet Airways. 

He also contended that he had not taken a loan from IDBI but that ‘Jet Airways Limited’ had taken a loan and hence the bank could not declare him a wilful defaulter independently without proceedings against the company.

Naresh Goyal’s Contentions

Appointed as a non-executive director.

Role was to engage in brand building, hunting for talent and best human resources for the company and increasing the presence of the company in the international market.

Not involved in the day-to-day affairs or executive decisions of Jet Airways. 

Not taken a loan from IDBI but that ‘Jet Airways Limited’ had taken a loan.