Case: Kingfisher Airlines Limited Vs. Union of India Through The Secretary, Ministry of Finance, Government of India &amp; Others

Circular gives a discretion to the Redressal Grievance Committee to decide whether personal hearing should be given or not. There is no express prohibition of the borrower to be represented by a lawyer. The purpose of the Master Circular issued by Reserve Bank of India is to find out whether the defaulter is siphoning of funds or diverting funds and if the Bank comes to that conclusion then it can put further restrictions on the borrowing ability of the borrower. In that sense, there is no adjudication made by the Grievance Redressal Committee but it makes only the assessment of facts and the conclusion is arrived at thereafter on the basis of these facts.22. In the present case, Petitioner Company owes an amount of Rs 6,900 crores from consortium of banks. Repayment of this public money is nowhere in sight. If the allegations in the show-cause notice issued by the Grievance Redressal Committee are correct then it would lead to further depletion of the funds of the Petitioner Company which would make it impossible for consortium of Banks including Respondent No.2 Bank to recover the public money which has been given to the Petitioner.23. Taking into consideration the urgency in the matter, in our view, therefore, the Petitioner is not entitled to be represented by a lawyer. We are fortified by the view taken by the learned Single Judge of the Kolkata High Court vide order dated 10/07/2014 passed in Writ Petition No.1924(W) of 2014 (Kingfisher Airlines Ltd vs. Union of India & Ors) wherein it has been held that in such cases borrower has no right to be represented by an advocate at the hearing before the Committee. This view of the learned Single Judge has been upheld by the Division Bench of the Kolkata High Court in AST No.320 of 2014 in Kingfisher Airlines Limited vs. Union of India & Others with CAN No.8329 of 2014 decided on 28/08/2014.24. Though the Petitioner had preferred an SLP before the Apex Court, the SLP had become infructuous because, by that time, the Petitioner had been declared as Wilful Defaulter. Though the said order was again challenged by the Petitioner before the Kolkata High Court and the Order of Grievance Redressal Committee was set aside, it was not set aside on the ground of the Petitioner not being allowed to be represented by the Advocate.25. We are therefore of the view that the borrower is not entitled, as a matter of right, to be represented by the Advocate before the Grievance Redressal Committee.26. However, in the peculiar facts and circumstances of the case, in order to curtail further time which may be taken for deciding the issue whether the Petitioner is a Wilful Defaulter or not, since the Petitioner may challenge this order in the Apex Court we are of the view that if the Petitioner gives an undertaking to this Court that if it is allowed to be represented by its advocate, its advocate would conclude his submissions in one day then in such an event the Petitioner will be permitted to engage an advocate. The Delhi High Court in its Order dated 28/08/2014 in Kingfisher Airlines Ltd vs. Union of India & Others delivered in W.P. (C) 5532/2014 has made the following observations:-The apprehension expressed by the learned counsel for the respondent that the petitioner is only seeking to delay the proceedings, can be allayed by fixing timelines. Accordingly, it is directed that the respondent shall provide the petitioners with copies of all documents that are relied upon by the respondent, if not already provided within a period of one week from today. The authorized representative of the petitioner alongwith an Advocate and a Senior Advocate, if any, will be present in the office of the respondent bank at 10.30 AM on 22.09.2014. It is also clarified that the petitioner shall confine their oral submissions on that day to not more than six hours. The hearing will be concluded on 22.09.2014 itself. The petitioner is at liberty to file written submissions alongwith any documents that the petitioner wishes to rely upon before the Committee on that date. The Committee shall thereafter take a decision whether the petitioner is a wilful defaulter.27. We are of the view that the formula which is adopted by the Delhi High Court would meet the ends of justice and the Petitioner would not have a grievance that it was not allowed to be represented by an advocate and, at the same time, there would be no question of further delay being caused after the advocate is appointed to represent the Petitioner and the hearing would be concluded immediately.28. In the present case, the first show cause notice was issued to the Petitioner in August, 2014. Thereafter, Petitioner filed two Writ Petitions in this Court on various grounds. Almost a year is passed after issuance of the said notice and yet, hearing has not been taken place before the Grievance Redressal Committee. The very purpose and object of the Master Circular issued by RBI would be rendered nugatory if the Grievance Redressal Committee does not come to a conclusion one way or the other expeditiously. It is under these circumstances, we are of the view that the Petitioner should give an undertaking to this Court that upon being permitted to be represented by an advocate, its advocate would conclude his submissions in one day and thereafter the Grievance Redressal Committee would take decision one way or the other.CONCLUSION:29. For the reasons stated hereinabove, we are of the view that the Petitioner is not entitled to be represented by a lawyer and therefore principles of natural justice will not be violated if the Petitioner is heard without being represented by a lawyer. However, in the peculiar facts and circumstances of the case and to avoid further delay, we permit the Petitioner to appoint an Advocate to represent the Petitioner provided the Petitioner gives an undertaking that hearing of the matter would be concluded in one day.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]20. From the conspectus of cases which have been cited before us, we are of the view that there cannot be any straight jacket formula which can decide whether a person is entitled to be represented by an advocate and ultimately it would all depend on facts and circumstances of each case.21. In the present case, both the Circulars namely Circular dated 01/07/2014 and 07/01/2015 do not expressly provide that the borrower can be represented by a lawyer. The second amended Circular gives a discretion to the Redressal Grievance Committee to decide whether personal hearing should be given or not. There is no express prohibition of the borrower to be represented by a lawyer. The purpose of the Master Circular issued by Reserve Bank of India is to find out whether the defaulter is siphoning of funds or diverting funds and if the Bank comes to that conclusion then it can put further restrictions on the borrowing ability of the borrower. In that sense, there is no adjudication made by the Grievance Redressal Committee but it makes only the assessment of facts and the conclusion is arrived at thereafter on the basis of these facts.22. In the present case, PetitionerCompany owes an amount of Rs 6,900 crores from consortium of banks. Repayment of this public money is nowhere in sight. If the allegations in thenotice issued by the Grievance Redressal Committee are correct then it would lead to further depletion of the funds of the PetitionerCompany which would make it impossible for consortium of Banks including Respondent No.2Bank to recover the public money which has been given to the Petitioner.23. Taking into consideration the urgency in the matter, in our view, therefore, the Petitioner is not entitled to be represented by a lawyer. We are fortified by the view taken by the learned Single Judge of the Kolkata High Court vide order dated 10/07/2014 passed in Writ Petition No.1924(W) of 2014 (Kingfisher Airlines Ltd vs. Union of IndiaOrs) wherein it has been held that in such cases borrower has no right to be represented by an advocate at the hearing before the Committee. This view of the learned Single Judge has been upheld by the Division Bench of the Kolkata High Court in AST No.320 of 2014 in Kingfisher Airlines Limited vs. Union of IndiaOthers with CAN No.8329 of 2014 decided on 28/08/2014.24. Though the Petitioner had preferred an SLP before the Apex Court, the SLP had become infructuous because, by that time, the Petitioner had been declared as Wilful Defaulter. Though the said order was again challenged by the Petitioner before the Kolkata High Court and the Order of Grievance Redressal Committee was set aside, it was not set aside on the ground of the Petitioner not being allowed to be represented by the Advocate.25. We are therefore of the view that the borrower is not entitled, as a matter of right, to be represented by the Advocate before the Grievance Redressal Committee.26. However, in the peculiar facts and circumstances of the case, in order to curtail further time which may be taken for deciding the issue whether the Petitioner is a Wilful Defaulter or not, since the Petitioner may challenge this order in the Apex Court we are of the view that if the Petitioner gives an undertaking to this Court that if it is allowed to be represented by its advocate, its advocate would conclude his submissions in one day then in such an event the Petitioner will be permitted to engage an advocate.We are of the view that the formula which is adopted by the Delhi High Court would meet the ends of justice and the Petitioner would not have a grievance that it was not allowed to be represented by an advocate and, at the same time, there would be no question of further delay being caused after the advocate is appointed to represent the Petitioner and the hearing would be concluded immediately.28. In the present case, the first show cause notice was issued to the Petitioner in August, 2014. Thereafter, Petitioner filed two Writ Petitions in this Court on various grounds. Almost a year is passed after issuance of the said notice and yet, hearing has not been taken place before the Grievance Redressal Committee. The very purpose and object of the Master Circular issued by RBI would be rendered nugatory if the Grievance Redressal Committee does not come to a conclusion one way or the other expeditiously. It is under these circumstances, we are of the view that the Petitioner should give an undertaking to this Court that upon being permitted to be represented by an advocate, its advocate would conclude his submissions in one day and thereafter the Grievance Redressal Committee would take decision one way or the other.For the reasons stated hereinabove, we are of the view that the Petitioner is not entitled to be represented by a lawyer and therefore principles of natural justice will not be violated if the Petitioner is heard without being represented by a lawyer. However, in the peculiar facts and circumstances of the case and to avoid further delay, we permit the Petitioner to appoint an Advocate to represent the Petitioner provided the Petitioner gives an undertaking that hearing of the matter would be concluded in one day.