Hearing of bank account holder is necessary

New Delhi:

The Supreme Court said that before classifying a bank account of a borrower as "fraudulent", he must be given an opportunity of being heard and if such action is taken, a reasoned order must be followed.

A bench headed by Chief Justice DY Chandrachud upheld a Telangana High Court judgment saying that classification of accounts as fraud has other consequences for borrowers, so they should be given an opportunity to be heard .

The bench said, "Before classifying the accounts of the borrowers as fraud under the 'master direction' on frauds, the bank should give them an opportunity of being heard."

This decision came on a petition by the State Bank of India.