The Supreme Court said that before an account is classified as a fraud, the borrower must be heard and if such action is taken, a reasoned order must be followed.
The Supreme Court said on Monday that a borrower should be heard before an account is classified as ‘fraud’ and if such action is taken, a logical order is to be followed Needed
Telangana High Court’s decision remains intact
A bench headed by Chief Justice DY Chandrachud, retained the decision of Telangana High Court, stating that the classification of accounts in the form of fraud is in civil results and hence such persons. One must give an opportunity to hear.
The bench said, “Banks should give a hearing an opportunity to the borrower before classifying their accounts as fraud under master instructions on fraud.”
Decision on SBI’s petition
The bench said that the decision to classify the account of the borrower as a fraud should be followed in a logical manner. This decision has come on the petition of State Bank of India.
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