# In the matter of M Suresh Kumar Reddy vs. Union of India

> HC judgment dated 2024-10-22. Citation: TCN-2024-HC-00016. The writ petition was filed by Mr. M. Suresh Kumar Reddy, the suspended director of M/s Kranthi…

- **Court:** HC
- **Order date:** 22 Oct 2024
- **Citation:** TCN-2024-HC-00016
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/m-suresh-kumar-reddy-vs-union-of-india-7c4b975c

## Summary

### Background

The writ petition was filed by Mr. M. Suresh Kumar Reddy, the suspended director of M/s Kranthi Edifice Private Limited, seeking a Writ of Mandamus to declare the action of respondent banks (Canara Bank and formerly Syndicate Bank) in not accepting the proposal for rehabilitation and restructuring of the existing SOD (Stressed Assets). The petitioner argued that the banks' actions were illegal, arbitrary, unconstitutional, and violated his fundamental rights under Articles 14 and 19(1)(g) of the Constitution of India, as well as the Master Directions of the RBI. The petitioner sought to set aside the declaration of the respondent No. 4 company (Kranthi Edifice Private Limited) as a non-performing asset (NPA).

## Facts

Mr. M. Suresh Kumar Reddy, the suspended director of M/s Kranthi Edifice Private Limited, filed a writ petition against the Union of India, Canara Bank (formerly Syndicate Bank), and Kranthi Edifice Private Limited. Kranthi Edifice Private Limited, incorporated under the Companies Act, 2013, and registered under the Micro, Small and Medium Enterprises Development Act, 2006, had been running infrastructure business for 35 years and was involved in irrigation projects. The company had availed credit card facilities from Canara Bank, including Rs. 12.00 Crores for working capital and Rs. 110.00 Crores for bank guarantee limit, maintaining a fixed deposit of Rs. 11.00 Crores as security. In 2018, due to a wrongful invocation of bank guarantees amounting to Rs. 8.40 Crores,

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## Issues and analysis

### Issue 1: Whether the respondent banks' action of not accepting the proposal for rehabilitation and …

**Ratio:** The ratio is based on the principle that instructions/directions issued by the Central

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**Reasoning:** The court reasoned that the Apex Court in S.L.P.(C) No.7898 of 2024 observed that all

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**Interpretation:** This issue involves the interpretation of the RBI's Master Directions and their

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**Application:** The court applied the ratio by directing respondent No. 2 (Canara Bank) to

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## Parties

- **Judges:** C. V. Bhaskar…
- **Appellants:** M. Suresh Kumar…
- **Respondents:** Kranthi Edifice…; Union of…
- **Other parties:** Kohi…

## Timeline

- **2012-05-18 — Udayam Regis…**: Kranthi Edifice Private Limited obtained…
- **2016-07-21 — RBI Master Di…**: RBI issued Master Directions regarding…

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