Delhi High Court: The Division Bench of Dhirubhai Naranbhai Patel, CJ and C. Hari Shankar, J. has issued a notice to Department of Financial Service in the Ministry of Finance on writ petition filed by Juhie (India) Private Limited.
As per the petition, Juhie (India) Private Limited (Petitioner Company) was working with a blemishless record for over two decades. It was aggrieved by order of Appellate Authority (Ministry of Finance) under Section 45-IA (7) of the Reserve Bank of India Act, 1934 wherein Appellate Authority vide the impugned order was pleased to remand the matter back to the Reserve Bank of India for reviewing the cancellation order regarding the cancellation of Certificate of Registration of the petitioner company, but interestingly the appellate authority did not set aside or stay the impugned cancellation order while remanding it back to the Reserve Bank of India (Respondent 1), which is completely against the settled proposition of law while remanding a matter back the Appellate Authority should set aside or stay the impugned order under-challenged and remit the matter back for de novo consideration on merits iron the issues framed by it, else purpose of remand gets frustrated/negated.
Further, it has been submitted that the petitioner company in the present case stands at the same footing as that of the petitioner in the Kerala High Court case, Rise Capital Operative Finance Private Ltd. v. RBI, WP(C) No. 2763 of 2019. Therefore, the same relief may be extended in the present matter.
The reasoning for the above is that, petitioner company despite fulfilling all the statutory conditions as per law, is not able to operate for the past one year and appellate authority without any due application of mind remanded back for the de novo consideration without setting aside the impugned order.
It has been stated in the petition that, the impugned order suffers from irrationality, illegality, perversity and Wednesbury principle of reasonability as it failed to take note of the stated position of law.
Cancellation order cancelling the COR of petitioner is arbitrary and against the principles of natural justice and fair play but also contrary to proviso to Sections 45-IA (3) and 45-IA (6) of RBI Act.
On facts it is required to point out that the petitioner company had requisite NOF of more than Rs 100 lakhs as on 31-03-2016 but it fell short of Rs 200 lakhs, rather the NOF was Rs 123.39 lakhs and the reason for not attaining the said NOF limit was because the petitioner company could not convert its loans from directors/shareholders into equity capital fro increasing the NOF. Statutory auditors certificate sated 31-03-2018 shows the NOF to be Rs 211.36 lakhs.
Hence on the date of show cause notice dated 02-05-2018, petitioner company had already fulfilled the requisite criteria of NOF.
Thus, on consideration of the facts and law and consequent infringement of fundamental rights under Articles 14 and 19 (1) (g) of the Constitution of India coupled with perverse order of appellate authority dated 08-08-2019 is a reason for the present writ petition which warrants consideration on merit and law.
High Court has directed the matter to be taken up on 23-10-2019. [Juhie (India) (P) Ltd. v. RBI, WP (C) 9702 of 2019, decided on 06-09-2019]