Convener cannot serve on both Identification and Review Committees in Wilful Defaulter proceedings.

The petitioners, directors of M/s Gupta Power Infrastructure Limited, challenged three actions by UCO Bank: a show cause notice (SCN) dated May 30, 2025; an order by the Identification Committee (IC) dated November 17, 2025; and a final order by the Review Committee (RC) dated January 28, 2026, declaring them "Wilful Defaulters".

The petitioners had submitted a detailed reply to the SCN on July 15, 2025.

They contended that the IC and RC orders were identical "replicas" of the SCN, lacked independent reasoning, and failed to consider their reply.

Crucially, the petitioners pointed out that the same individual—the Deputy General Manager (Recovery and Law)—served as the 'Convener' for both the Identification Committee and the Review Committee.

1. Whether the orders passed by the Identification and Review Committees were "reasoned orders" as required under the RBI Master Directions.

2. Whether the appointment of the same person as Convener for both the Identification Committee and the Review Committee violates the principles of natural justice and the RBI’s Master Directions regarding independent review.

Clause 3(r)(v) of the Reserve Bank of India (RBI) Master Directions on Treatment of Wilful Defaulters and Large Defaulters dated July 30, 2024 stipulates that the Review Committee shall not be comprised of members who were part of the Identification Committee.

Clause 4(a)(vii) ensures the right to a personal hearing and mandates the RC to assess facts and materials on record, including written representations; and Clause 4(a)(ix) explicitly requires the Review Committee to pass a "reasoned order".

The necessity of reasoned decisions in wilful defaulter proceedings as established in Narendra Seoomal Sabnani v. SBI (2021) and Amit Kumar Kejriwal v. Bank of India (2025).

The court found that the IC and RC orders were mechanical repetitions of the SCN, sharing identical paragraphs and allegations without engaging with the petitioners' detailed rebuttal.

Although the RC noted the existence of the petitioners' reply, it failed to provide any reasons for rejecting it, rendering the order "unreasoned" and in violation of Clause 4(a)(ix) of the Master Directions.

While the Convener is a non-voting member, their role in coordinating evidence, recording submissions, and ensuring procedural compliance is vital; one person convening both stages makes the review process a "mere formality" rather than an independent assessment.

This administrative overlap compromised the "firewall" intended between the identification and review stages.

The court set aside and quashed the Identification Committee’s order dated November 17, 2025, and the Review Committee’s order dated January 28, 2026. Consequently, the bank's notice to publish the petitioners' photographs in newspapers was also quashed.

The court granted UCO Bank liberty to initiate fresh proceedings from the stage of the Identification Committee’s constitution, provided it adheres to the law and the RBI Master Directions. Case disposed.