India, May 18 -- The Bombay High Court has quashed Union Bank of India's decision to classify the account of a Mumbai-based businessman Kamlesh Kanungo as "fraudulent," holding that the bank violated principles of natural justice by failing to grant him a hearing before taking the action.

A bench of Justices Bharati Dangre and Manjusha Deshpande, in an order passed on May 7, held that the bank's action "cannot be sustained" as Kanungo was not issued a show-cause notice or given an opportunity to respond before declaring the account fraudulent on September 9, 2020.

The case relates to allegations that Union Bank was cheated of Rs.21.80 crore between 2008 and 2018. An FIR was registered against Kanungo, proprietor of M/s. Trison Impex, in...