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Showing 161 to 180 of 1319 Records
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2021 (1) TMI 1161 - DELHI HIGH COURT
Status quo with regard to the ownership, possession and encumbrance upon the properties - HELD THAT:- The Adjudicating Authority shall not proceed further as this LPA is pending before this Court.
The operation, implementation and execution of the judgment and order of the learned Single Judge is stayed - List on 29.01.2021.
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2021 (1) TMI 1160 - CALCUTTA HIGH COURT
Maintainability of appeal - Monetary limit to make an appeal before High court - HELD THAT:- In view of Circular No.17/2019 F.No.279/Misc.142/2007-ITJ(Pt.) issued by Government of India, Ministry of Finance, Department of Revenue, Central Board Direct Taxes, Judicial Section dated August 8, 2019, monetary limit for filing appeals before the High Court has been increased to ₹ one crore and the tax effect in the present appeal being less than that, he may be permitted to withdraw the present appeal.
Appeal is dismissed as withdrawn, while keeping open the legal issue raised therein.
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2021 (1) TMI 1159 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD BENCH
Seeking grant of refund of Bank Guarantee and deposit the same in the Bank Account - amounts received during CIRP, during moratorium period - amounts forming part of the assets of the Corporate Debtor or not - violation of provisions of Section 14 of the Code - HELD THAT:- It is noted that Bank Guarantee was issued on 14.07.2016 for ₹ 3,34,90,458/- in favour of the customer of the Corporate Debtor, which was valid upto 31.08.2019. The Bank Guarantee was invoked by the Customer, Indian Navy on 22.08.2019 for warranty obligations before the commencement of the CIRP date i.e on 15.01.2020. The amount paid by the Respondent Bank on invocation of Bank Guarantee from its own funds on account of non-availability of Funds in Corporate Debtor's Accounts before the commencement of CIRP amounts to grant of credit facility to the Corporate Debtor before CIRP. The amount retained by the Customer, Indian Navy by invoking Bank Guarantee was released by Indian Navy on 28.09.2020. The amount was released by the customer, Indian Navy after the date of commencement of CIRP when the moratorium is in force to the Corporate Debtor.
As per Section 14 of 1B Code, the amount received during the CIRP when the moratorium is in force, is the asset of the Corporate Debtor and RP has to deal with the same as per the provisions of the 1B Code. The Respondent is not entitled to adjust the same when the moratorium is in force. If, he has any dues pending from the Corporate Debtor on the date of commencement of CIRP, it is open for him to file his claim before the RP.
Application allowed.
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2021 (1) TMI 1158 - NATIONAL COMPANY LAW TRIBUNAL, HYDERABAD
Removal form CoC - Related party or not - seeking restoration of voting percentage of the applicant to 100% as earlier existed - removal of Resolutions passed in 7th, 8th and 9th CoC Meetings - whether TSTPCL is a related party as claimed by the applicant or not and its inclusion in the CoC as a Financial Creditor to the Corporate Debtor is as per the IBC? - HELD THAT:- Respondent no. 3 squarely fits into the definition of 'related party' under section 5(24) (a), (h), (j), (1) and (m) of the Code. From the record submitted to the Tribunal it is observed that out of four directors of the Board of Directors, two directors are nominated by respondent no. 3. The role and responsibility of the Directors is to protect the interests of the Corporate Debtor and not to merely sit in the Board meetings of the corporation. They have a fiduciary role to protect the interests of the Corporate Debtor and are responsible for shareholders of the Corporate Debtor at all times. The Board is responsible to the shareholders of the Corporation. Therefore, the claim of the Resolution Professional that they are only nominated members and they do not have much say in the functioning of the company is untenable. Every director has responsibility to protect the interests of shareholders. Accordingly the Directors nominated by the corporation have to oversee the functioning of the Corporate Debtor.
We are not in agreement with the views of the Resolution Professional as well as respondent no. 3 in this regard that they are only nominee-directors and that they do not have much say in the functioning of the Corporate Debtor. Further on a close perusal of the Companies Act, Listing Regulations, it is evident that disentitling of a shareholder, who is a related party from exercising his voting rights in respect of any resolution relating to any contract or arrangement to which such a related party is a party. Therefore, we are not in a position to accept the contention of respondents no. 1 and 3 that nominee-director does not have significant influence on the functioning of the Corporate Debtor as untenable and not acceptable.
When we juxtapose and read the Articles of Association as well as the definition of 'related party' as given in the I&B Code, it is evident that two nominee-directors of respondent no. 3 have significant influence in decision making process of the Corporate Debtor. The Articles of Association clearly mention that action on important matters should be taken only by affirmative vote of 3 (three) or more directors, but there must be included in the qualified majority at least one director nominate by APTPCL - Article 62 plays vital role in deciding the subject matter in this case. From reading of Article 62 it is clearly evident that nominee-directors of respondent no. 3 have significant influence in the functioning of the Corporate Debtor and they cannot now claim that they are only nominee-directors and they do not have much role in the Corporate Debtor. Such a claim is untenable.
Thus, TSTPCL falls within the meaning of 'related party' as given in the I&B Code and Articles of Association of the Corporate Debtor - the Resolution Professional shall reconstitute the CoC treating the TSTPCL as a 'related party' - application disposed off.
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2021 (1) TMI 1157 - THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - loan were provided to Corporate Debtor along with Doshi Holdings Pvt. Ltd. (Doshi) as Co-borrower under three different Loan-cum-Pledge Agreements with the subsequent addendums - Financial Creditors - invocation of pledged shares, amounts to recovery of amounts or not - two separate Applications can be filed simultaneously under Section 7 or not - HELD THAT:- Since the “debt” and “default” is admitted by the Corporate Debtor, the Bench would examine the admissibility of the Petition based on the outcome regarding the two issues mentioned by the Corporate Debtor, i.e., Premier Limited against the Petitioner. This Bench notes that invocation of pledged shares does not amount to said monies recovered - it is clear that it is a step which has to be followed with the enforcement of security whereby the shares are transferred into the Pledgee’s account. Only after this, the Pledgee, i.e., in this case the Petitioner, would be in a position to choose to sell or to hold on to the shares as per its discretion. Therefore, this Bench finds that the contention of the Corporate Debtor that since the Pledge was invoked on 02.07.2020, it amounts to the value of debt being reduced to the extent of the existing price of the shares in the stock markets on 02.07.2020 which is about ₹ 2.06 crores in this case as not tenable.
It is entirely at the discretion of Pledgee which is the Petitioner to sell the shares in case the Pledger makes the default. However, in the event the pledgee does not exercise the discretion, no blame can be put on the pledgee. It is therefore clear that the Pledgee has the discretion to decide if he wants to sell the pledged security, when to sell it and how much to sell it. The Pledger cannot dictate terms to the Pledgee on how to exercise his right.
Two separate Applications can be filed simultaneously under Section 7 or not - HELD THAT:- As per the Judgment of Piramal, [2019 (2) TMI 316 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] two separate Applications can be filed simultaneously under Section 7 against Premier Limited as well as Doshi Holdings Private Limited who is Coborrower. However, under Section 7, if the claim against Premier Limited (Corporate debtor herein) is “Admitted” then for the same set of loans, arising under the same loan documents, the same debt/ claim against Doshi will not be permissible in terms of the NCLAT Judgment of Dr. Vishnu Kumar Agarwal Vs. Piramal Enterprises Limited [2019 (2) TMI 316 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI].
This Bench, on perusal of the documents filed by the Financial Creditor, is of the view that the Corporate Debtor defaulted in repaying the loan availed. The existence of debt and default is reasonably established by the Petitioner as a major constituent for admission of a Petition under Section 7 of the Code. Therefore, the Petition under sub-section (2) of Section 7 is taken as complete - Petition admitted - moratorium declared.
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2021 (1) TMI 1156 - TRIPURA HIGH COURT
Grant of subsidy - time limitation - rejection on the ground that the claim was submitted after expiry of two years from the period to which the claim related - Tripura Industrial Investment Promotion Incentive Scheme, 2012 - HELD THAT:- It is not in dispute that the petitioner is otherwise an eligible unit entitled to the refund of the value added tax under the said scheme, of course subject to fulfillment of the conditions contained therein. The scheme also envisages time limit for making application for refund. However, if the VAT department of the Government had delayed issuing necessary certificates of payment of tax to the petitioner, the application of the petitioner for refund cannot be rejected only on the ground of delay in making the same.
Both the objections of the respondents that the scheme does not envisage extension of time for making application for refund and that the petitioner at the outset had not made out any grounds justifying delay, are turned down. On record, the petitioner has produced applications for grant of certificate by the VAT authorities and copies of reminders. However, that all these aspects be first examined by the District Industrial Centre.
The District Industrial Centre shall consider the petitioner’s further representations both dated 13.07.2020 copies of which are produced at Annexure-9 to the petition and the contents thereof - Petition disposed off.
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2021 (1) TMI 1155 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH
Seeking stay of the further proceeding of the Company Petition - termination of Power Purchase Agreement (PPA) - HELD THAT:- The Application is intended to deflect the attention of the Tribunal from the blatant default in repayment of its debts. The Code is an independent legislation that provides effective resolution of debts. The Tribunal has exclusive jurisdiction in such matters. The objective of the CIRP under the Code is to ensure maximization of the value of the Corporate Debtor - the plea that the admission of the Company Petition would be prejudicial to the Corporate Debtor cannot a ground to stay the further proceeding of the Company Petition. The present Application is intended to delay the disposal of the Company Petition, which from the averments made in the Application deserves to be admitted. The Application therefore does not merit consideration and is liable to be rejected.
The observation would indicate that no other extraneous matter should come in the way of expeditiously deciding a Petition either under Section 7 or under Section 9 of the Code. The inability of the Corporate Debtor in servicing the debts or the reason for committing a default is alien to the scheme of the Code. The averments made in the instant Application would indicate that various factors apparently hindered the Corporate Debtor from carrying on its business. There were disputes between the Corporate Debtor and the recipient of energy as well as the change in supply chain management of the recipient of the energy may also have contributed to the lack of confidence between the entities - The decision in the matters pending before the Hon'ble Apex Court and other authorities would hardly have any bearing and impact on the issues involved in the present Company Petition under Section 7 of the Code.
This Authority is required only to see whether there has been a debt and the Corporate Debtor defaulted in making the repayments. These two aspects when satisfied would trigger Corporate Insolvency - there has been a considerable delay in disposal of the Company Petition.
The Application be and the same is rejected on contest.
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2021 (1) TMI 1154 - ITAT MUMBAI
Claim u/s 80IA in respect of parking lot developed on CIDCO land at truck terminal - assessee submitted before the AO that it has developed parking lot with access road at truck terminal, Kalamboli, Navi Mumbai on BOT basis and is responsible for repair, maintenance and operation of the said parking lot - HELD THAT:- In this case the assessee was awarded a project by CIDCO to construct a parking lot called truck terminal having facilities on BOT basis. Under the terms of award, the assessee was responsible for repair, maintenance and operation of the said terminal.
The assessee used to collect fee from the truck owners from the trucks and also pay yearly fee to CIDCO. According to the AO the assessee is not eligible for deduction under section 80IA of the Act on the ground that the truck terminal is not an infrastructure facility which was affirmed by Ld. CIT(A) in the appellate order. According to the revenue authorities the truck parking terminal is an independent contract with CIDCO which has nothing to do highways.
Whether the truck terminal is an integral part of highways or not? - We note that Finance Act, 2001 has modified the definition of infrastructure facility which means a highway project including housing or other activities being an integral part of the highway project. It is clear from the amended definition that any infrastructure which is part of the high way falls within the definition of infrastructure - examining the terms and conditions of award of contract to the assessee to construct, build or operate the said terminal on BOT basis, we find that this is an integral part of highway though the highway was existing already and it was only a stand alone project awarded to the assessee later on - As noticed that the said terminal was having various facilities as stated hereinabove. The case of the assessee finds support from the decision of Dy. Commissioner of Income Tax Vs. Vintage Advertising Pvt. Ltd.[2015 (6) TMI 593 - ITAT KOLKATA] wherein it has been held that assessee is entitled for deduction under section 80IA of the Act on bus shelter and foot over bridge - we direct the AO to allow the deduction under section 80IA.
Disallowance on account of labour charges equal to 1% of the total purchases - disallowance on adhoc basis made by the AO on the ground that these expenses were incurred in cash - CIT(A) partly allowed the appeal of the assessee by directing the AO to add 1% of the purchases - HELD THAT:- There is an apparent mistake in the order of Ld. CIT(A) the labour charges debited to the profit & loss account - We observe that the AO as well as the Ld. CIT(A) has made the disallowance on adhoc basis. We are of the view that ends of justice would be met if a reasonable disallowance is made on this account. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to disallow a sum of ₹ 1,00,000/-.
Addition u/s 14A read with rule 8D - HELD THAT:- We find merit in the contentions of the AR the disallowance under rule 8D2(iii) was wrongly made at 1.5% of the average investment instead of .5%. Therefore, the same is required to be rectified. Accordingly, we set aside the order of Ld. CIT(A) on this issue and direct the AO to make a disallowance at .5% of average investment. Needless to say that disallowance computed under rule 8D(ii) is correct. Accordingly, we direct the AO to delete the disallowance to the extent of ₹ 10,750/-. Ground is partly allowed.
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2021 (1) TMI 1153 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI PRINCIPAL BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in paying the claim despite after receipt of Section 8 notice served upon the Corporate Debtor - Operational creditors - suppression of documents seminal to decide the penalty and correspondence exchanged long prior to issuing section 8 notice - it is claimed that the amount retained by the Corporate Debtor is largely on account of penalty against the short supplies, and thus cannot be released to Operational Creditors - pre-existing between the parties before issual of Section 8 notice or not.
HELD THAT:- It is an admitted fact that from the Operational Creditor side that the Corporate Debtor replied to its Section 8 notice dated 12.04.2020, on 21.04.2020 i.e. within 10 days from the date of receipt of notice, in the reply, the Corporate Debtor has again disputed that the Operational Creditor is liable to pay penalty, therefore it could not be decided who is liable to pay whom, because if the penalty is more than the unpaid invoice amount retained by the Corporate Debtor, the Operational Creditor would be liable to pay the penalty remained due and payable by the Operational Creditor - the Operational Creditor counsel has filed rejoinder setting up a new case that since the Performance Bank Guarantee has not been retained, it is to be construed that no dues are outstanding against the Operational Creditor, therefore whatever defence taken up by the Corporate Debtor, the operational creditor says, could not be considered as dispute is in existence before receipt of Section 8 notice by the Corporate Debtor.
On record it is evident that final bill has not been prepared, penalties not discounted, the operational creditor has not deputed its authorized representative for finalization of final bill, therefore due itself cannot be assumed unless final bill is prepared, therefore question of default will not arise, in any event, dispute is preexisting between the parties as on the date section 8 notice the corporate debtor received, therefore it is a clear case hit by pre-existing dispute.
From the Operational Creditor side contention is dispute is frivolous, from the Corporate Debtor side contention is dispute is pre-existing - the Petition shall be dismissed on the ground that Petition is hit by pre-existing dispute - petition dismissed.
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2021 (1) TMI 1152 - COURT OF SESSIONS FOR GREATER MUMBAI
Grant of anticipatory bail - Fabrication of documents with intention to avail and utilize inadmissible 'Input Tax Credit' and to avail the export benefits - section 132(1)(b, 132(1)(c) and Sec. 132(1)(e)(e) of CGST Act, 2017 - HELD THAT:- As per say of the respondent, present applicant, his father and brother have purchased goods worth ₹ 2.47 crores from M/s. Neha Impex and M/s. Rohini Impex. These two firms in turn have purchased, the goods from M/s. Mahalaxmi Traders. As per investigation till date M/s. Mahalaxmi Traders is not in existence. Further, prima facie record reveals, that the firms and companies of the applicant which are run by him along with his father and brother has evaded tax to the tune of ₹ 12.5 crores. Moreover, as reflected by statement of Sachin Gaiwkad he is not owner/proprietor of M/s Neha Impex. Further statement of Jagdish Bhikaji Chouhan, it is transpired that he is dummy proprietor of M/s. Rohini Impex.
Considering the huge amount of tax evasion which has caused loss to the public exchequer, thorough investigation is required. Apart from this present applicant cannot pray for parity, while considering his prearrest bail on the ground that his father and brother are granted regular bail by the Addl. Chief Metropolitan Magistrate, as the parameters for consideration of regular bail and anticipatory bail are different.
Bail application dismissed.
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2021 (1) TMI 1151 - SC ORDER
Declaration of Non-performing asset - proceedings before the Debt Recovery Tribunal for the realization of its dues - applicability of time limitation - HELD THAT:- On the facts and in the circumstances of this case, without expressing any opinion on the question of law raised, no case for interference has been made out. The declaration of the non-performing asset was on 20 February 2010. The Appellant has taken recourse to proceedings before the Debt Recovery Tribunal for the realization of its dues. The proceedings before the NCLT were instituted beyond the period of limitation prescribed by Article 137 to the Limitation Act.
Appeal dismissed
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2021 (1) TMI 1150 - GAUHATI HIGH COURT
Seeking grant of bail - seizure of Gold bars - value of gold recovered/seized from each of the petitioners is below ₹ 1 crore or not - HELD THAT:- The value of the seized gold bars recovered from each individual petitioner as well as considering the period of detention of the petitioners in custody, they are granted bail.
The petitioners shall be released on bail in connection on furnishing bail bond of ₹ 25,000/- each with two suitable sureties each of the like amount, to the satisfaction of learned Chief Judicial Magistrate, Kamrup (Metro), Guwahati - bail granted subject to conditions imposed - application allowed.
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2021 (1) TMI 1149 - MADRAS HIGH COURT
Levy of Entry tax - no personal hearing was afforded to the petitioner before passing the impugned orders - principles of natural justice - HELD THAT:- Though in the impugned orders several notices are referred to, they were issued calling upon the petitioner to furnish their objections. It is beyond dispute that the personal hearing was not afforded to the petitioner. Therefore, on this sole ground, the orders impugned in these writ petitions are quashed.
The matter is remitted to the file of the respondent to pass orders afresh in accordance with law - Petition allowed by way of remand.
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2021 (1) TMI 1148 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU
Seeking to realize the third party guarantee at the earliest - seeking to remit the CIRP Cost/ Liquidation Cost to the Liquidator - seeking to foreclose the Fixed Deposits as per the Liquidator’s Letter and remit the proceeds of fixed deposits to Liquidation Bank Account and to pass suitable Orders for early dissolution of the Corporate Debtor - HELD THAT:- The facts as mentioned justify dissolution of the Company rather than to continue Corporate Debtor under Liquidation process, under the extant provisions of Code and the Rules there under. Since nothing remains to be realised, the liquidation process under the provisions of Code is deemed to have been completed under Chapter Ill of Part Il of Code. Therefore, it would be just and proper for the Adjudicating Authority to dissolve the Company, as prayed for by the Liquidator.
The Applicant without impleading necessary parties, cannot seek any directions against them and thus the Application is to be rejected on this ground alone. In addition to this, as rightly stated by Karnataka Bank Ltd., (Financial Creditor), the Applicant is not entitled for any additional fee as claimed. The Applicant got adequate fee in comparison to the work he has done.
It is hereby dissolved the Corporate Debtor namely, M/s. Bunt Solar India Pvt. Ltd., with immediate effect - Application allowed.
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2021 (1) TMI 1147 - NATIONAL COMPANY LAW TRIBUNAL HYDERABAD BENCH, HYDERABAD
Maintainability of application - initiation of CIRP - Corporate Debtor has defaulted in paying dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The Financial Creditor has established the debt and default through various documents filed along with the application. The application is, therefore, liable to be admitted
Petition admitted - moratorium declared.
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2021 (1) TMI 1146 - NATIONAL COMPANY LAW TRIBUNAL BENGALURU BENCH
Scheme of Arrangement - seeking to convene the meeting the of Equity Shareholders of the Demerged and Resulting Companies and to convene the meeting of the Unsecured Creditors of the Demerged Company etc. - Sections 230 to 232 of the Companies Act, 2013, R/w Companies (Compromises, Arrangements and Arrangements) Rules, 2016 - HELD THAT:- Various directions with regard to holding, convening and dispensation of various meetings issued - directions with regard to issuance of notices also issued.
The scheme is approved - application allowed.
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2021 (1) TMI 1145 - PRINCIPAL SPECIAL JUDGE FOR CBI CASES, HYDERABAD
Money Laundering - predicate/scheduled offences - Hearing on charges in the scheduled offence - entitlement to mould the prayer in the original petition by filing a memo, “that to take up the hearing on charges in the scheduled offence and the offence of money laundering simultaneously” - HELD THAT:- On careful reading of Section 43(2) of PML Act, it does not contemplate a trial of predicate/scheduled offence and the offence of money laundering simultaneously. The section only says that while trying an offence under the Act, a Special Court shall also try an offence, other than any offence referred to in sub-section (1) with which the accused may under the Code of Criminal Procedure be charged at the same trial - On reading of Section 44(1)(a) of PML Act, it only says that the offence punishable under Section 4 (PML Act) and any scheduled offence connected to the offence under that section shall be triable by the Special Court, in which the offence has been committed. The plain reading of the section goes to show that the Special Court can also try the scheduled offence but not simultaneously with money laundering offence.
Authorised person from Enforcement Directorate can also file an application before the Special Court which is dealing with the scheduled offence, which is other than the Special Court dealing with money laundering offence. On such application being filed by authorised person from Enforcement Directorate, predicate/scheduled offence can be committed to the Special Court as enshrined in Section 44(1)(c) of PML Act.
On careful reading of Section 2(1)(u) of PML Act, 2002, a wider definition is given to proceeds of crime including property not only derived or obtained from the scheduled offence, but also any property which may directly or indirectly be derived or obtained as a result of criminal activity relatable to a scheduled offence. Section 3 of PML Act, 2002, further clarifies that a person shall be guilty of offence of money laundering if such a person is found to have directly or indirectly attempted to indulge in concealment, possession, acquisition, use, projecting as untainted property, claiming as untainted property and the process or activity connected with the proceeds of crime is a continuing activity. Which itself shows the offence of money laundering is a continuing offence. Section 44(1)(d) Explanation provides for, that the Special Court shall not be dependent on any orders passed in respect of the scheduled offence - Sections 2(1)(u), 3 and 44(1)(d) of PML Act, 2002 clearly goes to show that the offence of money laundering is a stand-alone offence and the trial proceedings are completely different with that of the scheduled offence. Trial of money laundering offence is independent trial and it is governed by its own provisions, it will not meddle with the trial of scheduled offence.
Prevention of Corruption Act, 1988 and The Prevention of Money Laundering Act, 2002, are two different enactments, they decide the controversies that arise under respective Acts, one authority cannot interfere with the function of other authority under different Acts. PML Act has overriding effect under Section 71.
There are no merits in the applications and the same are dismissed.
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2021 (1) TMI 1144 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH
Scheme of Amalgamation by way of Merger by Absorption - Sections 230-232 of the Companies Act, 2013 - HELD THAT:- Various directions regarding holding convening and dispensation of various meetings issued - directions regarding issuance of various notices issued.
The scheme is approved - application allowed.
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2021 (1) TMI 1143 - MADRAS HIGH COURT
Seeking a direction to the respondents to unblock and make available the credit in the electronic credit register for the purposes of Goods and Service Tax - HELD THAT:- This writ petition is pre-mature since no representation has been made to the appropriate authorities seeking relief and this ought to have been done prior to approaching this Court with this Writ Petition.
Petition closed.
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2021 (1) TMI 1142 - CALCUTTA HIGH COURT
Applicability of Clause 2.1.2 (i) or Clause 2.1.3 of RBI Master Circular, dated July 1, 2015 - cash credit facility given to the petitioner classified as Non-Performing Asset (NPA) - Section 13(2) of the SARFAESI Act, 2002 and Section 13(4) of the 2002 Act - HELD THAT:- It is clear that the concerned bank has a discretion with regard to marking an account as NPA upon the account running overdue for 90 days. Clause 2.1.3 has to be read with the other provisions of the Master Circular.
The RBI Circular bearing DOR No. BP.BC.34/21.04.048/2019-20 dated February 11, 2020 provides for restructuring of advances in the MSME (Micro, Small and Medium Enterprises) sector. Such provision for one-time restructuring of existing loans to MSMEs only pertain to those classified as ‘standard’, which the account of the petitioner no.1 ceased to be from February 29, 2020 onwards. Moreover, Clause (i) thereof provides that the aggregate exposure, including non-fund based facilities, of banks and NBFCs to the borrower cannot exceed ₹ 25 crore as on January 1, 2020 for an MSME to be eligible for such restructuring. The petitioners, as per the annexures of the writ petition itself, had exceeded the ₹ 25 crore limit on November 30, 2019 itself, thus, rendering the petitioners ineligible for getting the benefit of the scheme contemplated by the Circular.
The petitioners have failed to prove any mala fides or arbitrariness on the part the respondents. The RBI Circulars cited by the petitioners are not attracted, since the account of the petitioner no.1 lost its status as a ‘standard’ account after February 28, 2020, when the same was classified as NPA. That apart, such classification on February 28, 2020 could not be said to be an arbitrary exercise beyond the pale of discretion of the bank and the respondent-authorities. Thus, there is no scope of finding fault with the legitimate exercise of discretion on the part of the respondents in the present case.
The acts/omissions complained of in the writ petition do not merit interference by the writ court - Appeal dismissed.
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