# In the matter of M Suresh Kumar Reddy vs. Canara Bank & Ors.

> HC judgment dated 2023-12-15. Citation: TCN-2023-HC-00006. The case involves a writ petition filed by Mr. M. Suresh Kumar Reddy, the suspended director of…

- **Court:** HC
- **Order date:** 15 Dec 2023
- **Citation:** TCN-2023-HC-00006
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/m-suresh-kumar-reddy-vs-canara-bank-ors-68d27f35

## Summary

### Background

The case involves a writ petition filed by Mr. M. Suresh Kumar Reddy, the suspended director of M/s. Kranthi Edifice Private Limited, challenging the classification of his company as 'Fraud' by Canara Bank (formerly Syndicate Bank) based on a meeting held on 04.02.2020. The petitioner claims he was not given notice before the declaration of fraud and only became aware of it through a counter-affidavit filed in another writ petition. The bank's decision was based on reports from an auditor and a forensic auditor, which indicated that the company fell under the category of fraud under Section 447 of the Companies Act.

## Facts

Mr. M. Suresh Kumar Reddy, the suspended director of M/s. Kranthi Edifice Private Limited, filed a writ petition challenging the classification of his company as 'Fraud' by Canara Bank. The classification was based on a meeting held on 04.02.2020. The bank's decision was based on reports from an auditor and a forensic auditor, which indicated that the company fell under the category of fraud under Section 447 of the Companies Act. The petitioner claims he was not given notice before the declaration of fraud and only became aware of it through a counter-affidavit filed in another writ petition (W.P.No.14217 of 2022). The bank reported the classification to CRILIC on 04.02.2020 and to RBI on 20.02.2020. The petitioner relies on the Supreme Court judgment in State Bank of

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## Issues and analysis

### Issue 1: Whether the classification of the petitioner's company as 'Fraud' by Canara Bank without prior …

**Ratio:** The ratio is based on the principle that any decision affecting a party's rights or

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**Reasoning:** The court reasoned that the petitioner was not given notice before the bank classified

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**Interpretation:** The interpretation of the law is that classifying a company as 'Fraud' has

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**Application:** In this specific case, the ratio and reasoning apply directly to the facts. The

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## Parties

- **Judges:** Surepalli…
- **Appellants:** M. Suresh Kumar…
- **Respondents:** Kranthi Edifice…; Canara…
- **Other parties:** Kohi…

## Timeline

- **2020-02-04 — Meeting held by Canara…**: Canara Bank classified M/s. Kranthi Edifice…
- **2020-02-04 — Report to…**: Canara Bank reported the classification of M/s. Kranthi Edifice Private Limited as…

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