The Calcutta High Court quashed the wilful defaulter notice issued to SREI, citing non-compliance with RBI master circulars regarding the issuance of such notices.
Calcutta HC Quashes SREI’s Wilful Defaulter Notice for Non-Compliance with RBI Norms
The Calcutta High Court has quashed a wilful defaulter notice issued against SREI Infrastructure Finance Limited, asserting that the notice failed to comply with the norms established under the Reserve Bank of India (RBI) master circulars. The Court found that the necessary demarcation between borrower data and corporate guarantor data was not made.
In its ruling, the Court pointed out that the Credit Information Bureau (CIBIL) report cited does not clearly attribute any intentional default to the corporate guarantor but merely encapsulates borrower information. As a result, the procedural flaws in issuing the notice were significant enough to necessitate the quashing of the action taken against SREI.
This ruling reiterates the importance of adherence to RBI guidelines for financial institutions, particularly when levying serious allegations such as wilful default against corporations.
The Court stated, "Failure to comply with RBI master circulars renders the defaulter notice ineffective and subject to quashing."
Citations
- SREI Infrastructure Finance v. RBI (2026) 21 CAL 734
