Trilegal secures Delhi High Court order setting aside fraud classification against Religare Finvest Limited
The leading Law firm in india, Trilegal successfully represented Religare Finvest Limited (RFL) in a writ petition before the Delhi High Court against 14 commercial banks, challenging the wrongful classification of RFL’s accounts as ‘Fraud’ under the Reserve Bank of India’s Master Directions on Frauds – Classification and Reporting by Commercial Banks and Select FIs, 2016.
In the proceedings, Trilegal sought the quashing of the ‘Fraud’ classification, arguing that the classification violated the principles of natural justice, as RFL was neither issued a notice nor provided an opportunity to be heard. It was further argued that RFL had made necessary efforts to rectify past mismanagement by its former promoters, had repaid all its dues, and had received ‘No Due Certificates’ from all the respondent banks—rendering the continued classification as ‘Fraud’ wholly unjustified.
The Delhi High Court set aside the arbitrary classification, holding that the action of the banks was taken without granting RFL an opportunity of hearing and was therefore contrary to the principles of natural justice as read into the Master Directions on Frauds by the Supreme Court.
This order is significant for RFL, as the ‘Fraud’ classification carried penal consequences and had been causing severe prejudice to its business operations and reputation. The judgment is expected to assist RFL in re-establishing its standing in the market.
The Trilegal dispute resolution team advising on the matter was led by Shankh Sengupta (Partner), supported by Aubert Sebastian (Counsel), Ribhu Garg (Counsel), and Arnav Doshi (Associate).
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