GET Stock QuotesNews18 APP
News18 English

Madhya Pradesh

Rajasthan

Poll in 1 seat deferred

Chhattisgarh

Telangana

Mizoram

»
2-min read

Gujarat High Court Raps RBI for Giving Directions to a Judicial Body

The court was hearing a petition filed by Essar Steel against insolvency proceedings.

PTI

Updated:July 17, 2017, 11:07 PM IST
facebookTwittergoogleskypewhatsapp
Gujarat High Court Raps RBI for Giving Directions to a Judicial Body
The RBI was told to be careful while issuing press releases. (Photo: Reuters)
Loading...
Ahmedabad: The Gujarat High Court on Monday rebuked the Reserve Bank of India for asking the National Company Law Tribunal in its June 13 directive to give priority to the insolvency proceedings against companies with huge debts.

It also questioned the functioning of the central bank. The bench of Justice S G Shah came down heavily on the RBI for stating in its press release dated June 13, 2017 that the Insolvency and Bankruptcy Code (IBC) proceedings against companies with outstanding dues of more than Rs 5,000 crore "will be accorded priority by NCLT."

Essar Steel had moved the high court challenging the RBI order to banks. The court also questioned the "functioning" of the RBI for its decision to issue the press release in which it had directed banks to initiate insolvency proceedings against defaulting companies.

"The RBI has to be careful while issuing press releases, it must be in consonance with the Constitutional mandates, based upon sound principles of law, but in any case should not be in the form of advice, guidelines or directions to judicial or quasi-judicial authorities in any manner what so ever," the court said in its order.

Further reacting to the central bank's submission that it has no document on record based on which the decision to issue press release was taken, the court said, "This goes to show the manner in which the RBI is functioning, in as much as there is a press release even without a decision at certain level that press release is to be published and what should be included in such press release."

"This is also an equally serious issue. It has been conveyed to the respondents that on such disclosure that there is no other document, pursuant to such disclosure, now, they would be debarred from relying upon any such document, if any," it added.

The court interpreted RBI's statement in its press release that "such cases (for insolvency proceedings) will be accorded priority by the NCLT" that the tribunal "has to give priority to cases filed by the directives of RBI against the cases, which are filed by other creditors or petitioners before the NCLT."

The RBI even tendered an apology to the court saying that the statement was made due to "poor drafting" of the press release, and even issued corrigendum on July 8, to delete the line. Through it press release dated June 13, the RBI had directed banks to launch IBC proceedings against companies with outstanding dues of more than Rs 5,000 crore, and for other NPAs, banks should finalise resolution plans in the next six months.

During its submissions, the central bank had apologised from the court for issuing that statement in the press. Essar Steel had moved the high court seeking the court's direction to quash the RBI's direction to the banks to initiate insolvency proceedings against it.
(Get detailed and live results of each and every seat of the state Assemblies in Madhya Pradesh, Rajasthan, Telangana, Chhattisgarh and Mizoram to know which candidate/party is leading or trailing and to know who has won and who has lost and by what margin. Our one-of-its-kind Election Analytics Centre lets you put on the psephologist's hat. Know interesting facts and trivia about the elections. Elections = News18)
Read full article
Loading...
Next Story
Next Story

Also Watch

facebookTwittergoogleskypewhatsapp
Most Active
Company Price Change %Gain
Yes Bank 189.30 1.45
Indiabulls Hsg 796.00 8.40
Reliance 1,108.45 -0.18
Sun Pharma 425.90 -1.29
ICICI Bank 351.85 0.54
Company Price Change %Gain
Yes Bank 189.30 1.34
Jyothy Labs 192.50 -0.70
Indiabulls Hsg 795.55 8.43
Larsen 1,415.95 1.11
Sun Pharma 426.40 -1.14
Top Gainers
Company Price Change %Gain
Indiabulls Hsg 795.80 8.38
Bajaj Finserv 6,170.00 3.02
HPCL 225.30 2.74
IndusInd Bank 1,619.75 2.37
Maruti Suzuki 7,635.40 2.19
Company Price Change %Gain
IndusInd Bank 1,618.60 2.27
Maruti Suzuki 7,634.00 1.96
Tata Motors 167.30 2.07
SBI 290.70 1.91
M&M 762.55 1.76
Top Losers
Company Price Change %Gain
UPL 773.10 -2.15
Sun Pharma 426.00 -1.26
TCS 1,990.40 -1.31
Coal India 244.60 -0.97
Eicher Motors 23,501.35 -0.93
Company Price Change %Gain
TCS 1,990.65 -1.39
Sun Pharma 426.40 -1.14
Coal India 244.75 -0.93
Asian Paints 1,322.95 -0.43
Bharti Airtel 304.60 -0.20

Live TV

Loading...
Countdown To Elections Results
  • 01 d
  • 12 h
  • 38 m
  • 09 s
To Assembly Elections 2018 Results