Court: 'Wilful Defaulter' Tag for Ratul Puri and Mother Legally Unsustainable

The Delhi High Court ruled that Ratul Puri and his mother Nita Puri's classification as 'wilful defaulters' was legally unsustainable, dismissing appeals by Bank of Baroda and Punjab National Bank. The court cited lack of evidence establishing funds were intentionally misused, impacting the defaulter declarations.

The Delhi High Court has ruled that the classification of Ratul Puri, former director of Moser Baer India Limited, and his mother, Nita Puri, as 'wilful defaulters' under the Reserve Bank of India's Master Circular is not legally tenable.

In a significant verdict, Justices C Hari Shankar and Ajay Digpaul rejected appeals submitted by the Bank of Baroda and the Punjab National Bank. The banks sought a reversal of the single-judge bench’s decision, which found no basis for the 'wilful defaulter' designation. The court emphasized that banks failed to verify convincingly whether the related transactions were intentional misdirections of borrowed funds.

The court underscored the gravity of such declarations, equating them to a 'civil death,' and emphasized that any such decisions must be firmly grounded in factual evidence and the borrower's conduct history.