Nation
Gujarat HC dismisses Essar plea challenging insolvency proceedings
The Gujarat High Court on Monday dismissed Essar Steel's writ petition challenging the RBI directive to a consortium of banks led by the State Bank of India to initiate insolvency proceedings against the company for its high non-performing assets.
 
Justice S.G. Shah issued an oral order stating that no relief could be granted to the steel major. The court's detailed order was expected later.
 
Essar Steel, in its July 4 petition, challenged the Reserve Bank of India's (RBI) direction to banks to refer cases of 12 companies, including Essar, with high NPAs directly to the National Company Law Tribunal (NCLT) and initiate insolvency proceedings. The central bank's June 13 directive was issued through a press release.
 
The company had claimed that a unilateral action was being initiated when it was in a restructuring mode and objected that it was being clubbed with the other 11 major defaulting firms at such time. The steelmaker had also alleged that it was being singled out.
 
The RBI's counsel disputed both stating that it was not true that the company was discussing restructuring of repayments with banks, while insolvency proceedings would in fact help the company to shape up and not close it down. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

COMMENTS

Ramesh Bajaj

4 months ago

All defaulters should be made to pay their dues.

New consumer protection law to be tabled in Parliament
New Delhi, The Consumer Protection Bill, 2017, which aims at strengthening the consumer protection mechanism, is set to be introduced during the monsoon session of Parliament.
 
The new law, which will replace current Consumer Protection Act, 1986, once it is passed in Parliament, enforces consumer rights and provides a mechanism for redressal of complaints regarding defect in goods and deficiency in services.
 
According to an official, the draft Bill is pending with the Standing Committee on Food and Consumer Affairs.
 
"Once the committee approves the draft Bill, it will go to the Cabinet. Subsequently, the government can introduce it in Parliament," said the official, who did not want to be identified. 
 
The official added that the main objective of the Bill remains establishment of mechanism for consumer protection. However, details about the quantum of punishment are not clear yet. 
 
It proposes to have Consumer Dispute Redressal Commissions, which will be set up at the district, state and national levels. Also, it seeks formation of Consumer Protection Authority to investigate consumer complaints.
 
A few months ago, Consumer Affairs Minister Ram Vilas Paswan had approved guidelines in accordance with the current Act in order to make service charge in restaurants "voluntary". 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 

User

COMMENTS

kirtida t ved

4 months ago

Consumer protection is very necessary. Sir, whether areas of cheating by share brokers can be covered. Can discuss in details. My mobile number is 9321029358

HC asks on record RBI orders on Essar Steel's insolvency proceedings
The Gujarat High Court on Thursday directed for placing on record before it an RBI directive to a consortium of 22 lenders to initiate insolvency proceedings against Essar Steel following its high Non-Performing Assets (NPAs).
 
Hearing the July 4 petition filed by the major steelmaker to seek quashing of insolvency proceedings, a single bench of Justice S.G. Shah expressed its surprise that the Reserve Bank of India (RBI) directive to a consortium of lenders led by the State Bank of India and Standard Chartered Bank had not been placed on court record neither by the petitioner nor the respondents.
 
It is this directive that is under challenge by Essar Steel, which has claimed in the court, among other things, that it was kept in the dark while the central bank asked the lenders to initiate the insolvency proceedings when the company was in a restructuring mode. 
 
The company also alleged that it is being singled out for action among all 12 major accounts identified as NPAs totalling Rs 7,50,000 crore.
 
Essar Steel had a debt of Rs 45,655 crore, of which Rs 31,671 crore had turned NPAs for banks by March 31, 2016. This increased to Rs 32,864 crore by March 31 this year.
 
The RBI, meanwhile, has disputed the company's claims. 
 
The central bank's counsel Darius Khambata told the High Court that it was crystal clear from the minutes of the meeting between the company and its lenders that it was "far from reaching any restructuring settlement". 
 
Also, he contended, Essar Steel was quite aware of insolvency proceedings against it at the National Company Law Tribunal.
 
As for the company's allegation that it was being singled out, the RBI counsel said the insolvency proceedings would actually help the company and added that the objective of the proceedings at the NCLT was to recover "maximum value in a minimum time-bound manner".
 
"The IBC (The Insolvency and Bankruptcy Code) is not for winding up a company but to resolve and restructurea to avoid winding up," Khambata said.
 
The RBI counsel said the list of 12 large NPAs against which the RBI had advised banks to initiate insolvency proceedings had been drawn to prevent the loss of public money. 
 
"The NCLT follows a time-bound, structured process, under statutory provisions. Its purpose is to maximise the value of assets and put it back into the system."
 
The hearing in the case will continue on Friday.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Online Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Online Magazine)