1. Petitioners state that Respondent No.1, a public sector bank forming part of a consortium of lenders to Respondent No.2 company, has unjustly and unlawfully classified both the Petitioners and Respondent No.2 as willful defaulters in violation of the RBI Master Circulars on willful default. It is stated, Respondent No.2 company was engaged in the manufacture of hybrid seeds, an activity heavily dependent on climatic conditions. The unprecedented drought of 2012-13 severely affected agricultural output across multiple States, resulting in crop failure and causing severe disruption to the company's seed production, revenues and liquidity. They assert that this natural calamity was the primary cause of financial distress, leading to temporary inability to service loan obligations, and that there was no deliberate or intentional default on their part. It is also stated, during this critical period, the consortium banks, including Respondent No.1, failed to release sanctioned working capital, failed to disburse the approved Pre-CDR Priority Debt, delayed approval of CDR package, delayed execution of Master Restructuring Agreement, and made only partial disbursement of funds. They also allege that lenders failed to release the required Rs.15 crores for seed packing operations during 2013 and 2014, thereby causing inability to place stock in time, leading to sales returns, inventory accumulation, operational delays, and severe liquidity strain.

               1.2. It is their case that the company had consistently serviced loan obligations prior to drought; they made several representations to government officials, consortium members, and JLM; and that letters and communications were issued requesting financial assistance. They contend that their distress was genuine, documented and acknowledged by the lenders on various occasions. Petitioners assert that willful default proceedings of Respondent No.1 suffer from fundamental procedural defects. It is contended that show cause notice dated 20.08.2016 was issued without supplying essential documents, including the forensic audit report, thereby depriving them of an effective opportunity to reply. They state that they nevertheless filed a detailed reply on 20.09.2016. They further contend that the notice dated 12.03.2018 fixing a personal hearing on 26.03.2018 was issued without furnishing full material, and that the order classifying them as willful defaulters was passed on the very same day as the hearing, indicating that the personal hearing was a mere formality without genuine consideration.

               1.3. Petitioners state that orders of both the Identification Committee and the Review Committee were received only on 25.03.2019 and that those orders do not constitute reasoned orders. They allege that Review Committee also passed its order without affording them an opportunity to appeal or make a representation. They contend that the orders are mechanical, lacking any analytical consideration of their replies, and merely reiterate the allegations of the show cause notice. The forensic audit report was not furnished to them until directed by this Court in Writ Petition No. 6544 of 2021, by order dated 16.04.2021. They state that even after such disclosure, the bank did not give them any meaningful opportunity or hearing and they were pursuing remedies diligently and that the delay in filing the present Writ Petition occurred due to legal advice and the pendency of parallel matters before this Court and the NCLT.

               1.4. Petitioners describe, in detail, the operational difficulties encountered by the company, including the seasonal nature of hybrid seeds, perishability, storage requirements, regulatory inspections, seizure of substandard seeds by agricultural authorities, deterioration of inventory due to disconnection of electricity in cold storage, and legal proceedings initiated by agricultural departments. They submit that these factors caused non-recovery of receivables, deterioration of stock, and inability to generate cash flows. They also address the allegations of diversion of funds. It is stated, no land was purchased during 2014-15, amount reflected in the balance sheet represented earlier capital expenditure funded by a term loan from L&T Finance, and that short-term working capital was never diverted for long-term purposes. They further state that routing of funds through Bank of Baroda and RBL Bank occurred solely because the Income Tax Department attached all consortium accounts in 2013 under proceedings rejecting the benefit under Section 10(1) of the Income Tax Act. All statements of such accounts were furnished to the consortium, including through e mail dated 22.09.2014 and in the JLM held on 26.09.2014 where SBI acknowledged receipt.

               1.5. Petitioners further state that procedural safeguards under the Master Circular as well as principles of natural justice, require issuance of a speaking order, supply of material, meaningful opportunity of hearing and an independent review by the Review Committee. They contend that none of these mandatory requirements were complied with. The Review Committee's order is a four-page document containing only signatures and agenda items and is bereft of reasons. They rely on the principles enunciated in the Master Circular and interpretation in State Bank of India v. Jah Developers Pvt. Ltd. ((2019) 6 SCC 787) to contend that the Review Committee must pass a reasoned order. Petitioners assert that the declaration of willful default has severe civil and reputational consequences, affecting their right to conduct business, right to access financial facilities, and their eligibility to participate in CIRP of Respondent No.2, an MSME, under the amended IBC framework permitting promoters of MSMEs to submit resolution plans. They contend that they are the most suitable persons to revive the company and that they have submitted a resolution plan of Rs.347 crores.

               1.6. Petitioners state that only three banks, namely SBI, IDBI and PNB, have declared them as willful defaulters, and that no other consortium member has done so. They contend that serial, uncoordinated declarations without considering the factual context violate Articles 14 and 21. It is stated, Writ Petition No. 27759 of 2024 was withdrawn on technical grounds to file separate petitions against different banks, and that the present petition is filed accordingly. Cause of action is a continuing one because the classification operates as a continuing tort, affecting their rights, reputation, and livelihood, and that Section 22 of the Limitation Act applies.

2. In the counter, Respondent No. 1, State Bank of India, denies all allegations except those specifically and expressly admitted. At the outset, it is stated, Writ Petition is not maintainable in view of suppression of material facts by petitioners. It is asserted, Petitioners have deliberately failed to disclose pendency of O.S. No. 82 of 2020 on the file of the Court of Senior Civil Judge, Hyderabad, wherein they have already challenged declaration of willful default. It is contended that subject matter and cause of action in the present Writ Petition are substantially the same as those in the pending civil suit, therefore, this Writ Petition is liable to be dismissed on the ground of suppression of facts and also on the ground that parallel proceedings on the same issue are impermissible in law.

               2.1. It is also stated, Petitioners had earlier challenged related proceedings in Writ Petition No. 6544 of 2021, wherein this Court directed the Bank only to furnish the forensic audit report and granted liberty to Petitioners to appear before the Committee. It is emphasized that this Court did not set aside any proceedings, nor did it express any view on the merits of the willful defaulter classification. According to the Bank, despite the Court's direction, Petitioners did not appear before the Committee, thus, failed to avail the opportunity afforded to them. It is argued that Petitioners, having failed to act upon the liberty granted, cannot now complain of violation of natural justice.

               2.2. Respondent No. 1 submits that classification of Petitioners as willful defaulters was made strictly in accordance with the RBI Master Circular dated 01.07.2015. The Bank asserts that all the mandatory procedural requirements were duly complied with. It is stated, show cause notice was issued to Petitioners on 20.08.2016, to which they submitted a reply dated 20.09.2016. Thereafter, a personal hearing notice dated 12.03.2018 was issued, calling upon them to appear before the Willful Defaulter Identification Committee. A personal hearing was duly conducted on 26.03.2018, following which the Identification Committee, upon evaluating the material placed before it, passed its order classifying Petitioners as willful defaulters on the same date. The Review Committee subsequently considered Petitioners' representation and confirmed the decision of the Identification Committee in its order dated 18.07.2018.

               2.3. The Bank states that Petitioners had deliberately defaulted on their repayment obligations notwithstanding their apparent financial capacity to repay. The account had been classified as a Non-Performing Asset on 30.04.2013 due to persistent defaults. Respondent No. 1 asserts that Petitioners misappropriated and diverted funds, failed to route sale proceeds through the TRA and consortium accounts, and violated the norms governing utilization of working capital. The Bank relies on the findings recorded during the lending relationship, including alleged diversion of funds to group entities, alleged deployment of short-term funds for long-term purposes, and alleged non-routing of proceeds through the designated accounts. Respondent No. 1 further states that Petitioners have been declared as willful defaulters not only by the State Bank of India but also by IDBI Bank and Punjab National Bank. Multiplicity of willful default declarations by different consortium lenders, according to Respondent No. 1, reinforces the conclusion that the Petitioners conduct was deliberate, intentional, and in violation of their obligations. It is also submitted that the Petitioners did not avail the review mechanism contemplated under the RBI Master Circular, and therefore cannot now be permitted to assail the orders after several years.

               2.4. The Bank states that the corporate debtor is presently undergoing Corporate Insolvency Resolution Process (CIRP), and Petitioners, who form part of the suspended management, have repeatedly attempted to obstruct and delay the CIRP and recovery efforts. Several One Time Settlement (OTS) proposals were submitted by Petitioners but none of them contained demonstrable proof of funding sources. It is also asserted that resolution plans submitted by Petitioners were defective for want of proof of financial capability. Petitioners are ineligible to submit a Resolution Plan under Section 29A(b) of the Insolvency and Bankruptcy Code, 2016, by reason of their classification as willful defaulters by three member banks of the consortium. The Bank points out that Section 240A of the IBC grants exemptions only in respect of clauses (c) and (h) of Section 29A, and that no exemption is available where the disqualification arises by virtue of clause (b). It is stated that this Writ Petition is a device to circumvent the ineligibility and gain an advantage in the CIRP, which cannot be permitted.

               2.5. Respondent No. 1 also states that explanations offered by Petitioners, including reliance on drought conditions and difficulties in operations, have no bearing on the findings of willful default. It is contended that declaration of willful default is based on Petitioners' conduct in relation to diversion and misuse of funds, and is not negated by operational or climatic difficulties. The Bank maintains that findings of Identification Committee and Review Committee are reasoned, based on materials available on record and passed in compliance with the RBI Master Circular. Writ Petition is hopelessly barred by delay and laches. Petitioners were informed of the decision of the Review Committee through letter dated 25.03.2019. Despite having knowledge of the classification as early as in 2019, Petitioners approached this Court only in 2025 without offering any satisfactory explanation for the delay. Finally, Respondent No. 1 asserts that the present Writ Petition is frivolous, vexatious and clearly intended to delay the CIRP and thwart recovery efforts. It is also stated, Petitioners have been engaging in piecemeal litigation with the object of thwarting the legitimate rights of lenders, hence, prays for dismissal of Writ Petition.

3. Heard Smt. Kanumuri Kalyani, learned counsel for petitioners and Sri Ajgal Ravi Babu, learned Standing Counsel for Respondent No.1 bank.

4. This Court has carefully examined the pleadings, material placed on record and the submissions advanced by both the sides. The undisputed factual position is that proceedings leading to declaration of Petitioners as willful defaulters culminated in the order of the Willful Defaulter Identification Committee dated 26.03.2018, which was confirmed by the Willful Defaulter Review Committee on 18.07.2018. These orders were communicated to Petitioners under the letter dated 25.03.2019. Petitioners have, however, approached this Court by way of this Writ Petition only in 2025, after a lapse of nearly six years from the date of communication and more than seven years from the date of the Committee proceedings.

5. Petitioners seek to explain the delay by contending that cause of action is continuing, they pursued multiple remedies during this period, including CIRP proceedings before the NCLT, and that they have acted with due diligence. They submit that the impact of willful defaulter classification continues to operate on a daily basis, thereby extending the cause of action. Respondent No. 1, on the other hand, asserts that Petitioners have been aware of the orders since 2019, and that pendency of other litigations, including corporate insolvency proceedings or earlier writ petitions, cannot justify the prolonged inaction. The Bank submits that Petitioners conduct reveals a pattern of delay designed to obstruct recovery and CIRP proceedings, and that the writ petition suffers from gross delay and laches.

6. As regards maintainability and the scope of judicial review, this Court is conscious of the principle affirmed in Sardar Associates v. Punjab & Sind Bank, that where a bank acts pursuant to binding directions issued by the Reserve Bank of India, such actions may be amenable to judicial review to the limited extent of ensuring compliance with mandatory regulatory requirements. Judicial review in this context is supervisory in nature; it does not entail re-appreciation of facts, nor substitution of Court's views for the commercial or financial assessments of expert committees. Interference is warranted only when there is a jurisdictional error, a substantial violation of the procedure prescribed under the RBI Master Circulars, or perversity in the decision-making process.

7. Petitioners allege that show cause notice was issued without enclosing relevant documents, orders of Identification Committee and Review Committee were passed mechanically, hearing on 26.03.2018 was merely an empty formality, and that Review Committee did not afford proper opportunity or consider their representation. Petitioners also assert that orders are unreasoned and do not deal with their explanations relating to drought conditions, failure of banks to release funds, deterioration of stock, attachment of accounts by the Income Tax Department, and the alleged bona fide nature of group-company transactions.

8. Respondent No. 1, however, placed on record contemporaneous documents including show cause notice dated 20.08.2016, Petitioners' reply dated 20.09.2016, notice of personal hearing dated 12.03.2018 and proceedings of the hearing held on 26.03.2018. The Bank has also placed on record the orders of both the Committees dated 26.03.2018 and 18.07.2018, which record the basis for the finding of wilful default. The Bank emphasizes that Petitioners did not avail the statutory remedy of review under the Master Circular, nor did they pursue the opportunity given by this Court in Writ Petition No. 6544 of 2021 to appear before the Committee after receiving the forensic audit report. The Bank also points out that Petitioners have already challenged the declaration of willful default in O.S. No. 82 of 2020, and present Writ Petition amounts to parallel proceedings.

9. On the merits of the challenge, this Court notes that Petitioners' explanations predominantly relate to external or operational difficulties, including drought conditions in 2012- 2013, non-release of sanctioned funds and Pre-CDR PD amounts by consortium lenders, delay in CDR process, deterioration of stock and agricultural output, attachment of operating accounts by the Income Tax Department, and difficulties in mobilizing working capital. These explanations pertain to commercial viability and operational challenges of the company. However, the willful defaulter framework under the Master Circular is concerned primarily with the conduct of the borrower, including diversion of funds, non-routing of proceeds, misutilisation of credit facilities, and breach of financing terms. Petitioners have not demonstrated that the Committees failed to consider their explanations or considered irrelevant material. The record does not indicate that the Committees acted without jurisdiction or proceeded on assumptions unsupported by evidence.

10. On the issue of procedural compliance, Petitioners assert that orders were passed on the same day of hearing, and that the Review Committee did not afford an effective opportunity. Respondent No. 1, however, has produced records showing that notices were issued, replies were received, and hearing was conducted. Petitioners have not placed contemporaneous evidence of seeking adjournment, demanding additional documents prior to the Committee orders, or indicating that they were prevented from placing their case. The orders of the Committees, though not elaborate, indicate the grounds on which conclusions were drawn. Petitioners have not shown that any mandatory step under the RBI Master Circular was omitted.

11. As to delay, Petitioners rely on the pendency of Writ Petition No. 6544 of 2021 and other proceedings to justify the late challenge. However, the record indicates that the said Writ Petition was disposed of on 16.04.2021 with limited directions, and nothing prevented Petitioners from challenging the underlying classification thereafter. The plea of continuing cause of action does not apply where the underlying decision attained finality years earlier and its consequences were known to Petitioners. The lapse of nearly six years without a reasonable explanation is significant and cannot be ignored in writ jurisdiction.

12. On a cumulative assessment, Petitioners have not established any jurisdictional error or procedural violation of such magnitude as to vitiate the proceedings. The delay in approaching this Court is substantial, and Petitioners have not shown sufficient cause to warrant condonation. In the light of the above, this Court does not find any ground to exercise its extraordinary jurisdiction under Article 226 of the Constitution.

13. For the reasons stated hereinabove and upon a comprehensive evaluation of the material on record and the submissions advanced, this Court is of the considered view that no case has been made out for interference with the orders passed by the Willful Defaulter Identification Committee on 26.03.2018 and the Willful Defaulter Review Committee on 18.07.2018. Petitioners have not demonstrated any jurisdictional infirmity, substantial procedural irregularity, or perversity warranting exercise of judicial review. The Writ Petition is also barred by gross delay and laches, for which no satisfactory explanation has been furnished.

14. Accordingly, the Writ Petition is dismissed. No costs.

15. Consequently, the miscellaneous Applications, if any shall stand closed.