WITHOUT PREJUDICE
REPLY TO SHOW-CAUSE NOTICE
|
Notice No. |
FMC/RM/2026-27/48 |
|
Notice dated |
26 August 2026 |
|
Noticee |
Mr. Hirak Nath Sounth, son of
Mr. Khudiram Sounth |
|
Represented by |
Mrs. Jayanti Sounth, wife and
authorised representative, owing to his benchmark disability and continuing
medical condition |
|
Reply date |
29th August’ 2026 |
To
The
Assistant General Manager (Fraud Monitoring Cell)
State Bank of India, Local Head Office, Kolkata
“Samriddhi Bhavan”, Block-D, 7th Floor
1, Strand Road, Kolkata – 700001
Phone
(033) 2210-9572
Email:
agmfmc.lhokol@sbi.co.in
Subject: Reply and objection to Show-Cause Notice No.
FMC/RM/2026-27/48 dated 26.08.2026 proposing categorisation/reporting of the
name/account as “fraud” under RBI guidelines
Reference: HBL A/c No. 40560822446 and Suraksha Loan No.
40561186497, stated to stand in the names of Mr. Abhijit Kar and Mrs. Swagata
Patra Kar as joint borrowers
Sir,
Under instructions from and on behalf of my
client, Mr. Hirak Nath Sounth, presently represented for the purpose of this
reply by his wife, Mrs. Jayanti Sounth, on account of his 40% disability and
his need for continuing specialised medical treatment, I submit this reply
within the time permitted. This reply is without prejudice to all rights,
remedies, objections and contentions available to my client in law and on
facts.
1. My client is a person with 40% disability and
requires specialised and continuing medical care. His medical condition
materially restricts his ability to travel, attend lengthy proceedings, collect
old records at short notice and personally prepare a technical response. His
wife, Mrs. Jayanti Sounth, is therefore assisting and representing him for
correspondence, subject to production of such authority, medical certificate
and identity documents as the Bank may reasonably require.
2. The disability and medical circumstances are not
advanced as an exemption from a lawful inquiry. They are placed on record to
seek reasonable procedural accommodation, adequate time, accessible
communication and a fair opportunity to answer the allegations. Any
communication may therefore also be served upon his wife and the undersigned
Advocate, and any hearing may kindly be held through video conference or at an
accessible SBI office near Kharagpur, with permission for Mrs. Jayanti Sounth
and counsel to remain present.
3. The expression “benchmark disability” includes a
person with not less than forty per cent of a specified disability under the
Rights of Persons with Disabilities Act, 2016. The Bank, as a public-sector
institution, is respectfully requested to act consistently with equality,
dignity, non-discrimination and reasonable accommodation while conducting the
proceeding.
4. The notice itself records that the SBI credit
facilities were extended to Mr. Abhijit Kar and Mrs. Swagata Patra Kar as joint
borrowers. It does not identify my client as borrower, co-borrower, guarantor,
mortgagor or account-holder in either facility. Yet the notice is titled “Show
Cause Notice: Individual Borrowers” and asks why “your account/name” should not
be categorised as fraud. This internal inconsistency goes to jurisdiction,
identity and the very basis of the proposed action. The Bank must first state
the exact legal capacity in which it proposes to proceed against my client and
the provision authorising the inclusion/reporting of his name.
5. The notice alleges, in a single composite
paragraph, that my client “executed multiple title deeds on the same property”
and refers to registrations dated 04.11.2015, 08.06.2020 and 09.11.2021.
However, it does not disclose the deed numbers, registering office, parties and
capacities, schedules, plot/khatian details, chain of title, nature of each
instrument, consideration trail, encumbrance-search results or the specific act
allegedly performed by my client. The phrase “same property” is asserted as a
conclusion without annexing the documents needed to verify identity of the
property.
6. No copy of the alleged deeds, title-search report,
advocate’s legal scrutiny report, valuation report, pre-sanction inspection,
disbursement voucher, seller-payment details, account statement, complaint,
investigation report, forensic report, statement of any person or
competent-authority note has been furnished. A person cannot meaningfully
answer an accusation of fraud without the material relied upon, especially
where the allegation concerns title instruments extending over several years.
7. The allegation of “misappropriation of the Bank’s
fund”, “wrongful gain” and “wrongful loss” is wholly unparticularised. The
notice does not state what sum was received by my client, on what date, into
which account, under which instrument, or how that sum was allegedly diverted
or retained dishonestly. It also records that repayment in the account has been
regular. Regular repayment does not by itself decide the title issue, but it
underscores the need for evidence—not assumption—before attaching the grave
stigma of fraud.
8. Save and except matters that are borne out by
genuine registered records and are specifically admitted after inspection, each
allegation of wilful falsification, destruction, alteration, manipulation,
dishonest intention, misappropriation, wrongful gain and wrongful loss is
denied. Nothing in this reply shall be treated as an admission regarding
identity of properties, legal effect of any document, receipt of consideration,
knowledge, common intention or participation.
9. The mere existence of instruments executed on
different dates does not, without examination of their nature and legal effect,
establish that multiple subsisting and inconsistent titles were deliberately
created. A later deed may form part of a lawful chain of transfer, correction,
release, reconveyance, cancellation, confirmation or other transaction. Whether
the schedules are identical, overlapping or distinct can be determined only by
comparing certified deeds, maps, boundaries, plot and khatian particulars and
the relevant registration records. The notice supplies none of these
particulars.
10. If SBI sanctioned and disbursed a home loan in
November 2021, the Bank would ordinarily have undertaken KYC, title
verification, search at the registering authority, valuation, legal scrutiny,
inspection and verification of the proposed mortgage/security. The notice does
not disclose what documents were submitted by the joint borrowers, who prepared
the title report, what encumbrances were found, whether original deeds were
deposited and how the Bank’s own due-diligence process addressed the earlier
instruments now cited. My client cannot be made a substitute for an examination
of the acts of the borrowers and the professionals or officials engaged in the
sanction process.
11. The notice also does not explain the source of
the assertion that my client personally executed every instrument referred to,
nor does it identify his role in each transaction. If an instrument stood in
the name of another person, the Bank must disclose the execution page,
signatures, photographs, fingerprints, presentation/identification details and
any material by which it attributes authorship, knowledge or dishonest intent
to my client.
12. Fraud is a serious finding carrying civil,
reputational and credit consequences. It cannot be inferred merely from an
apparent title discrepancy. There must be reliable material connecting the
person proceeded against with a deliberate deception and the resulting gain or
loss. The notice, as presently framed, states a suspicion and a conclusion but
does not furnish the evidentiary link between them.
13. The Supreme Court in State Bank of India &
Ors. v. Rajesh Agarwal & Ors., (2023) 6 SCC 1, held that principles of
natural justice apply before an account/person is classified as fraud because
of the grave consequences that follow. A meaningful opportunity requires
disclosure of the material relied upon, consideration of the response and a
reasoned decision.
14. Paragraph 2.1.1 of the Reserve Bank of India
(Fraud Risk Management in Commercial Banks (including Regional Rural Banks) and
All India Financial Institutions) Directions, 2024 requires, inter alia, a
detailed show-cause notice containing complete details of the
transactions/actions/events forming the basis of contemplated fraud
classification; not less than 21 days to respond; examination of the response
before classification; and service of a reasoned order dealing with the
relevant facts, the submissions and the reasons for the decision.
15. The present notice does not satisfy the
requirement of complete disclosure. The 21-day opportunity cannot be effective
if the underlying documents are withheld. The response period should therefore
run afresh from the date on which legible copies of all relied-upon material
are supplied. Until then, no adverse inference, classification, reporting to
RBI/Central Fraud Registry or communication to any credit information company
or law-enforcement agency should be made on the basis that my client failed to
answer undisclosed material.
For a complete and effective supplementary reply,
kindly furnish the following legible documents and particulars at the earliest:
1. Certified/legible copies of every deed relied
upon, including complete schedules, endorsements, execution pages and
registration particulars for the instruments dated 04.11.2015, 08.06.2020 and
09.11.2021;
2. The precise plot, khatian, mouza, J.L. number,
municipal/holding details, area and four boundaries by which SBI concludes that
all three instruments concern the identical property;
3. The loan applications, sanction letter, loan
agreement, KYC documents, declarations and title documents submitted by the
joint borrowers, limited to material relied upon against my client and subject
to lawful redaction of irrelevant personal data;
4. The title-search/encumbrance report, legal
opinion, valuation report, site-inspection report, pre-sanction and
post-sanction verification reports, and record of deposit of original title
deeds;
5. The complete disbursement trail, including date,
amount, beneficiary, bank account and instrument through which any loan
proceeds are alleged to have reached my client;
6. The Early Warning Signal/Red Flag trigger,
investigation or forensic report, complaint, statements, internal note and
competent-authority approval relied upon for issuing the notice;
7. The exact proposed category of fraud, the
applicable clause of SBI’s Board-approved Fraud Risk Management Policy, and the
legal status/capacity in which my client is proposed to be reported; and
8. Any material said to establish falsification, manipulation,
dishonest intention, wrongful gain, wrongful loss, common design or knowledge
on the part of my client.
16. Considering my client’s 40% disability and
ongoing specialised medical treatment, kindly grant at least 21 clear days from
actual delivery of the complete relied-upon material to submit a supplementary
reply. If a medical procedure, hospitalisation or advised rest intervenes, a
reasonable further extension may be granted upon production of medical papers.
17. Before any adverse decision, kindly afford a
personal hearing before the competent authority. The hearing may be conducted
by secure video conference or at an accessible SBI office near Kharagpur. Mrs.
Jayanti Sounth and the undersigned Advocate may be permitted to assist and represent
my client, subject to the Bank’s reasonable formalities.
18. All future notices, documents and the final
reasoned order may kindly be served simultaneously upon my client, Mrs. Jayanti
Sounth and the undersigned Advocate. This request is made to ensure effective
participation and should not be construed as waiver of personal service where
required by law.
In the circumstances, my client respectfully
calls upon SBI to withdraw/drop the proposed fraud classification against Mr.
Hirak Nath Sounth, there being no disclosed material establishing his status as
borrower/account-holder or his intentional participation in any fraud; and in the alternative, keep the entire
proposed action in abeyance and furnish all relied-upon documents and
particulars listed above; permit a supplementary reply within 21 clear days
after complete disclosure and grant an accessible personal hearing with
representation by his wife and Advocate; refrain, pending completion of due
process, from classifying or reporting his name/account as fraud or taking any
consequential stigmatic or coercive action solely on the basis of the present
notice; consider and record each submission in a speaking and reasoned order
and serve that order before giving effect to any adverse conclusion; and
grant such further relief and procedural
protection as fairness, disability accommodation and the facts of the case
require.
This reply is submitted bona fide and without
prejudice to my client’s right to supplement, amend or correct it after receipt
and inspection of the complete records. All rights and remedies in civil,
criminal, constitutional and regulatory law are expressly reserved.
Yours
faithfully,
ASHOK
KUMAR SINGH
Advocate
High Court at Calcutta
Authorities referred to;
1.
State Bank of India & Ors. v. Rajesh Agarwal & Ors., (2023) 6 SCC 1;
Civil Appeal No. 7300 of 2022, judgment dated 27.03.2023.
2.
Reserve Bank of India, Master Directions on Fraud Risk Management in Commercial
Banks (including Regional Rural Banks) and All India Financial Institutions,
2024, RBI/DOS/2024-25/118, dated 15.07.2024, particularly paragraph 2.1.1.
3.
Rights of Persons with Disabilities Act, 2016, including the statutory concept
of benchmark disability and the principles of equality, dignity and reasonable
accommodation.
