Reprimanding the banks, the court said that it is necessary to listen to the side of the borrowers as well. It will not be right to call anyone a defaulter without listening to the side.
Supreme Court reprimanded banks, it is necessary to tell before declaring any account default
The Supreme Court has given a jolt to the banks on Monday. The Supreme Court has given a big decision in the bank loan case. Reprimanding the banks, the court said that it is necessary to listen to the side of the borrowers as well. It is not appropriate to take any decision without listening to their side. Also, until the side of the borrower is not heard, his account should not be declared as default.
The court said that putting the account of the borrowers in the category of fraud without hearing their side or without hearing can have serious consequences. By doing this their account will be blacklisted. Therefore banks should read the ‘audi ultem partem’ i.e. master directions on frauds and give an opportunity of being heard to the borrowers.
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Bank read notification before declaring defaulter – Court
The court further said in the hearing that the guideline of ‘audi ultem partem’ must be read by the Reserve Bank of India to find out the category of bank accounts as fraud or defaulter account. Because to declare a defaulter, banks will have to give strong reasons. A bench headed by Chief Justice DY Chandrachud and Justice Hima Kohli has heard today the decision given by the Telangana High Court in December 2020.
Along with this, Justice Chandrachud’s bench has also rejected the decision which was contrary to it. Let us tell you, the Telangana High Court had said that according to the rule of Audi Ulterm Partem, any party should be given a chance to be heard. No matter how small the case may be, before declaring any party as a defaulter, its side should be heard.
What is ‘Audi Ulterm Partem’?
Audi alterm partem is a kind of principal of justice. Under which no person or borrower can be declared a defaulter without hearing. Everyone should get a chance to be heard.