ORDER : (Vaibhavi D. Nanavati, J.) : 1. Issue RULE, returnable forthwith. Mr. A.S. Panesar, learned advocate waives service of Rule for and on behalf of the respondent – Bank. 2. Heard Mr. Mehul Sharad Shah, learned advocate appearing for the petitioner and Mr. A.S. Panesar, learned advocate appearing for the respondent – Bank. 3. By way of the present Petition, the petitioner herein has challenged the order dated 20.11.2023 (Annexure-C) passed by the respondent – Bank declaring the account of Vimal Oil & Foods Limited as a ‘fraud’ account. Being aggrieved by the said order, petitioner herein has preferred the present Petition and prayed for the following reliefs: “(A) To issue a writ of mandamus and/or any other appropriate writ, order or direction quashing and setting aside the impugned order dated 20.11.2023 issued by respondent Bank declaring the account of VOFL as "fraud" pursuant to RBI Directions on Fraud dated 01.07.2016 (Annexure-C) and all further consequential steps/actions/measures holding the same as illegal, in violation of principle of natural justice and against the provisions of Section 32A of IBC Code, 2016; (B) Pending admission, hearing and/or final disposal of this petition, Your Lordships may be pleased to restrain the respondent Bank from reporting the decision dated 20.11.2023 (Annexure-C), of declaring the account of VOFL as "fraud" to the Law Enforcement Agency for investigation and be further pleased to direct the respondent Bank to hold on all the steps and actions, if already initiated. (C) Pending admission, hearing and/ or final disposal of this petition, Your Lordships may be pleased to stay the execution, implementation and operation of the impugned order dated 20.11.2023 (Annexure-C); (D) To pass such other and further orders and relief as may be expedient and necessary in the circumstances of the case.” 4. 1. Mr. Mehul Sharad Shah, learned advocate appearing for the petitioner submits that the Vimal Oil & Foods Limited (for short ‘VOFL’) was admitted into Corporate Insolvency Resolution Process (CIRP) vide order dated 19.12.2017 by the Adjudicating Authority, National Company Law Tribunal, Ahmedabad Bench, Ahmedabad in a petition filed by Bank of Baroda under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short ‘the IB Code’) being CP (IB) No. 135 of 2017. 4.2. Mr. 4.2. Mr. Mehul Shah, learned advocate submits that, as the Committee of Creditors (CoC) did not approve any resolution plan, the Adjudicating Authority on receipt of MA 17 of 2018 under Section 33 of the IB Code by the Resolution Professional, ordered liquidation of VOFL the Corporate Debtor vide order dated 19.12.2019. The Liquidator of the VOFL – Corporate Debtor issued Invitation For Expression of Interest (EOI) to sell the Corporate Debtor as a going concern together with all connected licenses, permissions, trademarks, patents, registrations, formulations and property rights in accordance with the provision of IBC, 2016 and rules made there-under. 4.3. Mr. Mehul Shah, learned advocate submits that, in response to the invitation for EoI, M/s. Arrhum Tradelink Private Limited – petitioner herein, submitted an EoI dated 11.11.2020 alongwith all requisite documents as required by the liquidator. On 04.12.2020, the e-auction was convened, wherein, the offer of M/s. Arrhum Tradelink Private Limited was found to be the highest for purchasing the Corporate Debtor, viz. Vimal Oil & Foods Limited, as a going concern and it was declared as successful bidder. Thereafter, M/s. Arrhum Tradelink Private Limited have already paid total consideration amount of Rs.69.95 Crores to the Liquidator and the Liquidator has also distributed the sale proceeds to all consortium member banks including the respondent bank. 4.4. Mr. Mehul Shah, learned advocate submits that, the Liquidator thereafter executed a sale agreement dated 03.03.2021 in favour of Arrhum Tradelink Private Limited thereby selling the Corporate Debtor, viz. Vimal Oil & Foolds Limited, as a going concern, which is duly produced at Annexure-E and Asset Sale Agreement is dated 11.03.2021, duly produced at Annexure-F. 4.5. Mr. Mehul Shah, learned advocate submits that, the respondent Bank had issued show cause notice and had also passed the impugned order dated 20.11.2023 relying upon the provisions of the Master Directors on ‘Fraud’ by RBI, 2016, which is duly produced at Page-125, declaring the account of Vimal Oil and Food Limited as a fraud account. 4.6. It is the case of the petitioner herein that the aforesaid order passed by the respondent herein is against the principle of ‘Clean Slate’ and also after the said company being auctioned and purchased by Arrhum Tradelink Private Limited, the impugned order is required to be quashed and set aside. 4.6. It is the case of the petitioner herein that the aforesaid order passed by the respondent herein is against the principle of ‘Clean Slate’ and also after the said company being auctioned and purchased by Arrhum Tradelink Private Limited, the impugned order is required to be quashed and set aside. The petitioner herein cannot be held liable for the dues, that are due and payable by the erstwhile owner and the petitioner herein having purchased the property by way of e-auction and having deposited the entire amount and the same also having been distributed to the consortium bank including the respondent bank herein. 5. On 01.12.2023, following order came to be passed, which reads thus: “1. Mr Mehul Sharad Shah, learned advocate appearing with Mr Ketul Patel, learned advocate for the petitioner submitted that the Sale Agreement dated 03.03.2021 was executed by the liquidator of M/s Vimal Oil & Foods Limited, a company under liquidation on one hand and the petitioner and M/s Arrhum Tradelink Private Limited on the other. A public advertisement was published and apropos which, the expression of interest was received from the buyer even M/s Arrhum Trade Link Private Limited had filed an undertaking that it is fit and proper person not under any legal disability or barred under Section 29A of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “the Code of 2016”) or any provisions of any law for time being enforce. 2. It is submitted that the company is being managed on ongoing basis and M/s Arrhum Tradelink Private Limited had purchased the assets of M/s Vimal Oil & Foods Limited by making payment of Rs.69.95 Crores so also seven receivables by making payment of Rs.5,25,00,000/-. It is submitted that M/s Vimal Oil & Foods Limited being purchased as ongoing concern, cannot be held liable for any acts done by the previous management of the company and therefore, M/s Vimal Oil & Foods Limited has been taken over by M/s Arrhum Tradelink Private Limited on a clean slate with a clear understanding that all past liabilities/investigation shall stand extinguished. 3. It is next submitted that in furtherance of the e-auction proceedings, the respondent bank had issued a no objection certificate dated 22.03.2021 clearly stating that the M/s Vimal Oil & Foods Limited was sold on going concern basis in accordance with the provisions of the Code of 2016. 3. It is next submitted that in furtherance of the e-auction proceedings, the respondent bank had issued a no objection certificate dated 22.03.2021 clearly stating that the M/s Vimal Oil & Foods Limited was sold on going concern basis in accordance with the provisions of the Code of 2016. After almost more than 2 years that the notice was issued and close to 3 years, that the order has been passed. Reference is also made of the order passed by the National Company Law Tribunal. The respondent bank had clearly expressed that it releases all its rights, claims, mortgage, hypothecation etc. over the e-auctioned assets/properties of M/s Vimal Oil & Foods Limited sold to M/s Arrhum Tradelink Private Limited through the liquidator. It has been declared that upon issuance of the no objection certificate, all the liabilities of M/s Vimal Oil & Foods Limited shall stand discharged excluding seven receivables as specified in Schedule 1 and that the bank shall not have any right to proceed against the assets/properties of the M/s Vimal Oil & Foods Limited auctioned under the Regulation 32(e) of the IDBI (Liquidation Process) Regulations, 2016. It is submitted that all what has been preserved, is taking action regarding invoking the personal guarantee, corporation guarantee etc. executed by the respective promoters and directors. 4. Therefore, when the assets of M/s Vimal Oil & Foods Limited were sold as a going concern and the respondent bank having issued the no objection certificate in the year 2021 i.e. on 22.03.2021, the respondent bank, could not have issued the notice dated 11.08.2023 requiring M/s Vimal Oil & Foods Limited to file its reply, failing which, the account of M/s Vimal Oil & Foods Limited would be categorized as a fraud account. It is submitted that in past, proceeding for declaring the account of M/s Vimal Oil & Foods Limited was initiated and the account was declared as a fraud account which, was subject matter of challenge before this Court. It is submitted that in past, proceeding for declaring the account of M/s Vimal Oil & Foods Limited was initiated and the account was declared as a fraud account which, was subject matter of challenge before this Court. Writ petition was filed by the directors of the erstwhile M/s Vimal Oil & Foods Limited which came to be rejected and in the appeal, the Hon’ble Division Bench, gave a liberty to the directors of the company to file detailed representation to the competent authority of the bank which was directed to be considered by the appropriate authority or the committee of the bank; however, the Hon’ble Division Bench, clarified that the order shall not come in the way of CBI in any manner in continuing with the investigation of the alleged offences pursuant to the FIR lodged by the bank. 5. The said order of the Division Bench, was challenged before the Apex Court and the Apex Court in the case of State Bank of India v. Rajesh Agarwal & Others reported in (2023) 6 SCC 1 , has even quashed and set aside the judgment of the Hon’ble Division Bench dated 23.12.2021. It is submitted that Apex Court, vide said judgment, has read the principle of audi alterm partem in clauses 8.9.4 and 8.9.5 of the Master Directions on fraud. It has been held and observed that consistent with the principles of natural justice, the lender banks should provide an opportunity to a borrower by furnishing a copy of the audit reports and allow the borrower a reasonable opportunity to submit a representation before classifying the account as fraud. It is submitted that the notice dated 11.08.2023 was issued to M/s Vimal Oil & Foods Limited despite the fact that subsequently, the assets of M/s Vimal Oil & Foods Limited has been purchased by M/s Arrhum Tradelink Private Limited in the e-auction proceedings. The copy of the notice was received by M/s Arrhum Tradelink Private Limited, it filed its reply dated 23.08.2023. Without referring to the said reply, straightaway the order dated 20.11.2023 has been passed declaring the account of M/s Vimal Oil & Foods Limited as a fraud account. The copy of the notice was received by M/s Arrhum Tradelink Private Limited, it filed its reply dated 23.08.2023. Without referring to the said reply, straightaway the order dated 20.11.2023 has been passed declaring the account of M/s Vimal Oil & Foods Limited as a fraud account. It is submitted that the petitioner was not in receipt of the said reply; however, the same was received through one of the members of the office of M/s Vimal Oil & Foods Limited and therefore, the captioned writ petition. 6. It is next submitted that in past, the Bank of India has lodged an FIR against M/s Vimal Oil & Foods Limited. It is submitted that the respondent bank is one of the consortium members which, is clear from the contents of the FIR and the lead bank is Bank of India which has lodged the FIR dated 21.05.2021. It is clear that the respondent bank, being one of the members was aware about filing of the FIR which was subject matter of challenge before this Court by filing a Criminal Miscellaneous Application no.11557 of 2021 and vide CAV judgment dated 24.08.2022, considering various aspects namely aspect of e-auction, the provisions of the IB Code etc. the petition came to be allowed and M/s Vimal Oil & Foods Limited was directed to be discharged from the offences registered against it in connection with the FIR lodged with the Bhopal Police Station, Bhopal. This Court, while allowing the discharge, has categorically observed that “when the bonafide persons, takes over the management of the corporate debtor, they should not be penalized for the action of erstwhile management of the corporate debtor. Thus, M/s Vimal Oil & Foods Limited as a going concern and its properties would not be liable for the alleged fraud of the earlier management.” It is submitted that with this observation, the FIR against the M/s Vimal Oil & Foods Limited has been quashed and set aside. It at all the authorities, are desirous of taking any action, it is open to them to take the action against the suspended directors, promoters etc.; however, M/s Arrhum Tradelink Private Limited is only concerned that he having purchased the assets of M/s Vimal Oil & Foods Limited by e-auction, the order dated 20.11.2023 declaring the account of M/s Vimal Oil & Foods Limited as a fraud, ought not to have been passed. It is submitted that since now the final order is passed and it is likely that steps in furtherance of the order may be taken i.e. registration of the FIR etc. It is submitted that such further steps, will not only entail the civil but criminal consequences. 7. Considered the submissions. Issue notice to the respondents, returnable on 22.12.2023. Ad-interim relief is granted in terms of paragraph 9(B). Direct service, today, is permitted. Over and above normal mode of service, service through e-mail is also permitted.” 6. Today, when the matter is taken-up for hearing, Mr. A.S. Panesar, learned advocate appearing for the respondent – Bank has placed on record a communication dated 07.10.2023. The same is taken on record. Reliance is placed on item no.2 with respect to the account of M/s. Vimal Oils and Foods Limited, SAM Branch, Ahmedabad, wherein, the Fraud Monitoring Group-II upon due deliberation observed that the opportunity of hearing was given to the erstwhile promoter and director of company and the reply that was received was not satisfactory. Considering the above, the Committee classified the erstwhile promoter and director of company as Fraud. 7. In light of the aforesaid document placed on record, wherein, it is stated that the Fraud Monitoring Group-II thought it fit only to classify the account of erstwhile promoter and director of the Company as fraud, the petitioner herein being the auction-purchaser, the aforesaid order is not applicable to the present petitioner. The aforesaid communication dated 07.10.2023 of the respondent Bank, which is duly placed on record, in exercising of powers under Article-226 of the Constitution of India, the impugned order passed by the respondent Bank dated 20.11.2023 (Annexure-C, Pg-125), declaring the account of the present petitioner - M/s. Vimal Oil and Foods Limited, as a fraud account is required to be quashed and set aside. 8. For the foregoing reasons, the impugned order passed by the respondent Bank dated 20.11.2023 (Annexure-C, Pg-125), declaring the account of present petitioner - M/s. Vimal Oil and Foods Limited, as a fraud account is required to be quashed and set aside and is hereby quashed and set aside to the aforesaid extent. 9. The present Petition is allowed to the aforesaid extent. Rule is made absolute to the aforesaid extent. Direct service is permitted.