Archive · 2 Aug 2025
NCLT Dismisses Sri Adhikari Brothers Plea on Fraud Notice
Imagine a company called Sri Adhikari Brothers that owed money to Canara Bank.
The company made a plan to pay back the money, and Canara Bank agreed.
However, Canara Bank then sent a notice asking if the company did something wrong, like fraud.
The company didn't like this and went to court.
The court said that Canara Bank could still investigate if the company did something wrong, even though they had a payment plan, because it was a separate process.
So, the court sided with Canara Bank.
NCLT dismissed Sri Adhikari Brothers' plea against Canara Bank's fraud classification show-cause notice.
The application sought to stop Canara Bank from classifying the account as fraudulent.
Canara Bank issued a show-cause notice after approving the resolution plan.
The applicants argued the notice violated the approved resolution plan.
NCLT ruled the show-cause notice was a separate process from the resolution plan.
- Who
- National Company Law Tribunal, Sri Adhikari Brothers Television Network Limited, Canara Bank
- What
- NCLT dismissed Sri Adhikari Brothers' plea against Canara Bank's fraud classification show-cause notice.
- When
- December 2023
- Where
- Mumbai
- Why
- To determine if Canara Bank could proceed with classifying the account as fraudulent.
Sri Adhikari Brothers
Canara Bank
Show-Cause Notice Validity
Sri Adhikari Brothers
The SCN was an "afterthought" and should not have been issued.
Canara Bank
Canara Bank has the right to investigate potential fraud regardless of the resolution plan.
Violation of Resolution Plan
Sri Adhikari Brothers
Issuing the SCN violated the approved resolution plan.
Canara Bank
The SCN was not a violation, as it was a preliminary investigation.
- Applicant
- Sri Adhikari Brothers Television Network Limited, Markand Navnitlal Adhikari
- Respondent
- Canara Bank
- CIRP Admission
- December 20, 2019
- Resolution Plan Approved
- October 10, 2022
- NCLT Sanction
- December 8, 2023
- Show-Cause Notice Date
- October 29, 2024