Bombay High Court Overturns Fraud Declaration Against Naresh Goyal by Bank of India

The Bombay High Court nullified Bank of India's decision to label Jet Airways owner Naresh Goyal's account as 'fraud'. Justice R. I. Chagla's ruling also negated related actions, including any communication with Central agencies. This judgement highlights issues of procedural fairness and natural justice in financial fraud declarations.

The Bombay High Court has delivered a landmark verdict, annulling the Bank of India's declaration of Jet Airways owner Naresh Goyal's account as 'fraud'. This decision by Justice R. I. Chagla effectively nullifies all subsequent actions precipitated by the fraud label, including reports sent to Central agencies.

Naresh Goyal had contested the Bank of India's classification of his account as fraudulent, claiming the decision violated principles of natural justice due to the lack of a hearing. The plea argued that such a designation would unjustly restrict Jet Airways and its directors from accessing financial services, thus endangering future business prospects.

According to documents, the Joint Lenders Forum had previously decided against any action following a Forensic Audit Report's findings, which cleared Goyal of wrongdoing. Despite this, the Bank later issued conflicting show-cause notices, failing to provide critical documents requested by Goyal. The court's verdict, therefore, highlights significant procedural oversights in the Bank's actions.

(With inputs from agencies.)