In Brief
The Supreme Court held that setting aside an administrative action for violation of natural justice principles does not bar authorities from proceeding afresh. The RBI issued Master Directions on fraud reporting by banks; banks declared company accounts fraudulent and referred cases to CBI. High Courts quashed both the administrative actions and criminal FIRs. The Court clarified that administrative actions and criminal proceedings are distinct and stand on different footings. Principles of natural justice do not apply at FIR registration. An FIR independently sets the law into motion regardless of concurrent administrative action's validity. Banks can re-initiate administrative procedures with proper notice and hearing; investigations continue without coercive action pending High Court review.
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