JUDGMENT : 1. Rule. Rule made returnable forthwith. Heard by consent of parties. 2. By this Writ Petitions the Petitioners are seeking a declaration that the acts of the Respondent Nos. 1 and 2 of declaring / classifying the accounts of the Petitioners as “fraud” and the impugned order dated 19 th September 2025 in terms of the Reserve Bank of India (Fraud Risk Management in Commercial Banks including Regional Rural Banks) and All India Financial Institutions) Directions, 2024 (“RBI Master Directions”) as being illegal, null and void, and ultra vires the RBI Master Directions. Consequential prayers have also been sought. 3. The Respondent – Union Bank of India (“Bank”) had commissioned a Forensic Audit Report of Backbone Tarmat Alfaraa JV (BTA) which was completed on 5 th December 2019. The Report highlighted alleged misuse of credit facilities availed by BTA from the Respondent – Bank as well as alleged irregular Letters of Credit, inflated stock statements and fund diversions in BTA Accounts. The Forensic Audit Report was placed before the Central Level Fraud Scrutiny Committee (Empowered Committee to examine the accounts/incidents from the angle of fraud) of Respondent – Bank on 21 st July 2020. 4. The Petitioners, as Directors of BTA received email on 3 rd July 2025 from Respondent – Bank bearing impugned Show Cause Notice dated 2 nd July 2025 wherein Forensic Audit Report dated 5 th December 2019 was enclosed. 5. The Petitioner – Mr. Jawaharlal Rijhumal Gangaramani had been diagnosed with aggressive high-grade B-cell lymphoma, a life-threatening form of cancer, and had started undergoing medical treatments from the year 2015 till date. He along with his wife – Usha Jawaharlal Gangaramani (Petitioner in Writ Petition No. 35534 of 2025) with the assistance of their Legal Advisors prepared their responses dated 24 th July 2025 to the Show Cause Notice and duly sent the same to the Respondent – Bank on email and via Registered Post on 25 th July 2025 and was received by the Respondent –Bank on 28 th July 2025. 6. The Respondent – Bank passed the impugned order on 19 th September 2025 classifying BTA and its Directors including the Petitioners and one Nitesh as “fraud” under the RBI Master Directions without considering the Petitioners’ submissions / responses dated 24 th July 2025 and/or submissions contained therein. 7. 6. The Respondent – Bank passed the impugned order on 19 th September 2025 classifying BTA and its Directors including the Petitioners and one Nitesh as “fraud” under the RBI Master Directions without considering the Petitioners’ submissions / responses dated 24 th July 2025 and/or submissions contained therein. 7. The Petitioners have addressed letters dated 26 th September 2025 to the Respondent – Bank highlighting the non-consideration of the Petitioners response letters and the need for due process and request for withdrawal of fraud classification and a personal hearing. 8. The Petitioners received an email dated 29 th October 2025 from Respondent – Bank enclosing the impugned communication dated 23 rd October 2025 stating that the Petitioners’ responses dated 24 th July, 2025 were beyond 21 days and “cannot be considered” and confirmed the fraud classification. 9. Mr. Sharan Jagtiani, learned Senior Counsel appearing for the Petitioners has taken this Court through the relevant documents annexed to the Petitions. He has submitted that the Respondent – Bank vide the Show Cause Notice dated 2 nd July 2025 requested the Petitioners to show cause as to why the BTA should not be declared as ‘fraud’. The reply of the Petitioners was to reach the Respondent – Bank within 21 days of the Show Cause Notice. 10. Mr. Jagtiani has submitted that the Show Cause Notice was issued after a period of almost five years from the completion of the Forensic Audit Report commissioned by the Respondent – Bank and which Report had observed that certain transactions of BTA were irregular and/or fraudulent. 11. Mr. Jagtiani has submitted that under Clause 4.1.5 of the RBI Master Directions once an account has been red-flagged i.e. prior to the commissioning of the Forensic Audit Report, the entire process of classification of the account as fraud or removal of red-flagged status shall ordinarily be completed within 180 days from the date of first reporting of the account as red-flagged on the CRILC platform. He has submitted that the Respondent – Bank in the present case by issuing the Show Cause Notice over five and a half years after the account of BTA was red-flagged has not complied with the said Clause of the RBI Master Directions. 12. Mr. He has submitted that the Respondent – Bank in the present case by issuing the Show Cause Notice over five and a half years after the account of BTA was red-flagged has not complied with the said Clause of the RBI Master Directions. 12. Mr. Jagtiani has submitted that apart from the Respondent – Bank not complying with the aforementioned Clause of the said RBI Master Directions, in the impugned order dated 19 th September 2025, has not even considered the responses dated 24 th July 2025 of the Petitioners to the Show Cause Notice issued by the Respondent – Bank on 2 nd July 2025 (received by the Petitioners on 3 rd July 2025). He has submitted that under Clause 2.1.1.2 of the said RBI Master Directions, a reasonable time of not less than 21 days is to be provided to the Persons / Entities on whom the Show Cause Notice was served to respond to the Show Cause Notice. He has submitted that from the letter dated 23 rd October 2025 of the Respondent – Bank to the Petitioners it is evident that the Respondent – Bank has proceeded on an erroneous premise that a prescribed period of 21 days is provided to respond to the Show Cause Notice under the RBI Master Directions. The responses of the Petitioners being after that period has accordingly not been considered in the impugned order. He has submitted that the impugned order on this ground alone is required to be set aside. 13. Mr. Prakash Shinde, leaned Counsel appearing for the Respondent – Bank has supported the impugned order. He has submitted that the impugned order has classified the account of BTA and its Directors as fraud as per the RBI Master Directions. He has sought for time to file Affidavits-in-Reply to the Petitions. 14. We have considered the submissions. As provided in the RBI Master Directions, in particular Clause 2.1.1.2 thereof, a reasonable time of not less than 21 days shall be provided to the Persons/Entities (the Petitioners) on whom the Show Cause Notice was served by the Bank (the Respondent) to respond to the Show Cause Notice. In the present case, inspite of the Petitioners having given their responses to the Show Cause Notice dated 2 nd July 2025 on 24 th July 2025, the responses have not been considered by the Respondent – Bank. In the present case, inspite of the Petitioners having given their responses to the Show Cause Notice dated 2 nd July 2025 on 24 th July 2025, the responses have not been considered by the Respondent – Bank. The impugned order is accordingly in violation of the principles of natural justice and contrary to the RBI Master Directions. 15. The Respondent – Bank ought to have upon considering the responses of the Petitioners passed a reasoned order which they have failed to do so in the present case. 16. We accordingly, consider this a fit case to set aside the impugned order dated 19 th September 2025 by directing Respondent – Bank to take into consideration the responses of the Petitioners, in the event it intends to pursue the Show Cause Notice. 17. Hence, the following order is passed. :: ORDER :: (i) The impugned order dated 19 th September 2025 passed by the Respondent – Bank insofar as it relates to the Petitioners is quashed and set aside. (ii) The Respondent – Bank is directed to take into consideration the responses of the Petitioners dated 24 th July 2025 to the Show Cause Notice issued on 2 nd July 2025. This is in the event they intend to proceed with the Show Cause Notice. (iii) The Respondent – Bank shall inform the Reserve Bank of India to whom they have communicated the impugned order that the impugned order has been quashed and set aside by this order, within a period of one week from today. (iv) The Respondent – Bank shall not take any action / coercive steps against the Petitioners pursuant to and / or in furtherance of and / or in implementation of the declaration / classification of the BTA account as “fraud” or declaring the Petitioners as being responsible for the alleged fraud committed in view of impugned order being quashed and set aside. (v) The Writ Petitions are accordingly disposed of. There shall be no order as to costs.