In a review petition, the Delhi High Court on Monday upheld its earlier ruling to reject Bank of Baroda's fraud classification of businessman Ratul Puri in connection with his former solar energy company Moser Baer Solar Limited (MBSL)..Justice Dharmesh Sharma was deciding a review petition filed by Puri to correct certain typos in a judgment passed by the High Court in October last year, in which his fraud classification by Bank of Baroda was quashed. Saying that the present order would be part and parcel of the October 2024 verdict, the Court said,"In view of the aforesaid discussion, the present application is allowed and the earlier judgment dated 25.10.2024 passed by this Court in W.P.(C) 2765/2023 is hereby reviewed, and thus, apart from correcting the typographical mistakes as indicated in paragraph (17) above, the discussion on merits of the purported impugned action by the respondent Bank in declaration the account of the petitioner as ‘fraud’ vide Show Cause Notice dated 20.06.2019 is hereby held to be arbitrary, unfair, illegal and untenable in law.".The case centers around Puri's involvement with MBSL, a subsidiary of the Moser Baer Group that was established in 2007 to manufacture solar cells and modules. The company, which was valued at over USD 1 billion in 2007, faced severe financial difficulties following the global financial crisis and alleged dumping by foreign entities in the Indian solar market.Puri had approached the High Court in 2023 after discovering that Bank of Baroda had classified him as ‘fraud’ in the Central Fraud Registry, allegedly in connection with loans availed by MBSL, a company he had exited in 2012. Puri contended that he had not been served with proper notice, nor was there any credible basis for such a serious designation over a decade after his resignation from MBSL.The High Court, in its original ruling dated October 25, 2024, accepted Puri’s contentions and quashed the Bank’s declaration, holding that it was unsupported by evidence and violative of principles of natural justice..In the review proceedings, the Bank argued that its declaration of ‘fraud’ was based on a forensic audit report prepared by M/s Haribhakti & Co LLP, which had raised serious concerns about fund diversion, irrational investments and related-party transactions at MBSL. The Bank insisted that the Court ought to have recorded detailed findings on these specific allegations.However, Justice Sharma declined to reopen the matter, holding that:The allegations cited in the forensic audit report had already been addressed and found lacking in prior proceedings.No new material had been presented that would justify revisiting the issue.The legal threshold for declaring a person as ‘fraudulent’ is higher than that for a ‘wilful defaulter’ and was not met in this case.“The respondent bank was always aware of not only the investments but also the trading transactions... In fact, the lender banks, including the respondent, reviewed the investments at the time of the CDR of MBSL and found no act of fraud, misutilization, diversion, or siphoning of funds,” the Court noted..Ratul Puri was represented by Advocates Vaibhav Mishra, Ekansh Mishra and Shubham Tiwari..Bank of Baroda was represented by standing counsel Kush Sharma, along with Advocates Nishchaya Nigam and Vagmi Singh..[Read Judgment]
