Plea in SC claimed around Rs 1,900 crore are lost every day due to
PSBs not invoking personal guarantees of big corporate loan defaulters.
The Supreme Court
has asked the Finance Ministry to respond to a representation seeking
disciplinary action against public
sector banks (PSBs) for not invoking personal guarantees of promoters and
directors of firms defaulting in repayment of huge loans.
The plea claimed around Rs 1,900 crore are lost every day due to PSBs not
invoking personal guarantees of big corporate loan defaulters.
In an order on
Monday, a Bench comprising Justices R F Nariman and Navin Sinha took note of
the submissions of senior advocate Manan Kumar Mishra and asked him to approach
the Ministry of Finance within two weeks with the representation on the issue
and the government will have to reply in four weeks thereafter.
“We are of the
view that at page ...of the Writ Petition it has been made clear that the
Ministry of Finance itself has, by a Circular, directed personal guarantees
issued by promoters/managerial personnel to be invoked.
“According to the
petitioners, despite this Circular, Public Sector Undertakings continue not to
invoke such guarantees resulting in huge loss not only to the public exchequer
but also to the common man,” the top court said in its order.
The plea, filed by
one Saurabh Jain, has sought “to initiate disciplinary proceedings against PSU
Banks which have not invoked the personal guarantees of promoters,
directors, or managerial personnel in accordance with the circular...”.
Mishra, during the
hearing, has submitted that the statistics show there was a loss of
approximately Rs 1.85 trillion in a financial year to the PSBs while they shy
away from invoking personal guarantees of the biggest corporate defaulters.
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