KOTAK MAHINDRA BANK LTD. vs HINDUSTAN NATIONAL GLASS & IND.LTD.

The Supreme Court held that the classification of a borrower as a wilful defaulter by a bank must adhere to the guidelines set forth in the Reserve Bank of India's Master Circular on Wilful Defaulters. The Court emphasized that the bank must provide adequate opportunity to the borrower to contest the classification before finalizing it. The appeal was allowed, setting aside the High Court's order that had upheld the classification without due process, thereby reinforcing the principles of natural justice under Article 14 of the Constitution.