Kingfisher Airlines winning the legal battle against United Bank of India's effort to name its directors including Vijay Mallya wilful defaulter seems to have encouraged at least one more troubled corporate house to take the legal recourse and stop its banker from taking actions.
On Saturday, dna broke the story that Calcutta High Court has turned down United Bank's decision to declare Kingfisher along with four of its directors wilful defaulters on technical grounds. The decision brought to an abrupt end one of the keenly watched legal battles of 2014, which might have sealed the fate of Mallya's rapidly shrinking business empire and his future ambition including protecting his remaining investments like Mangalore Chemicals.
Following the court's ruling on the Kingfisher case on December 24, another industrial house, SPS group of Bipin Vohra, which has interests in steel, shipping and entertainment, has now won a temporary reprieve, this time against UCO Bank even before the bank could name the group a wilful defaulter.
Vohra, who is now building the Marriott hotel in Kolkata after buying it out from Emaar MGF and whose group companies like SPS Steel and Bengal India Global Infrastructure have taken loan from UCO Bank, approached the court on fear of being declared a wilful defaulter. He claimed before the court that several meetings were fixed with the bank but the group's representatives were not entertained.
Vohra has told that he would submit documents by January 4 supporting his case, and UCO has told the court that no decision would be taken without hearing out the borrower.
Court has now ordered a meeting between the company representatives and the bank on January 9, and asked UCO not to declare the companies wilful defaulter before that.
"Let the petitioners' representatives meet the officers of the Grievance Redressal Cell of the bank on January 9 at a time mutually convenient and discuss the matter. The petitioner apprehend that in the meantime the writ petitioner might be declared as a wilful defaulter. Chowdhury (counsel for UCO) submits that until and unless the Grievance Redressal Cell hears the writ petitioners and comes to a finding, there is no possibility of the petitioner being declared as a wilful defaulter," Judge Arijit Banerjee said in the ruling.
Incidentally, Vohra was also earlier named by United Bank as a wilful defaulter, which he had strongly opposed, and told dna that he has an order from the Appellate Authority for Industrial and Financial Reconstruction that prevents the bank from naming his companies as wilful defaulters.
United Bank has now deleted names of the companies belonging Vohra in its latest list of wilful defaulters, thereby accepting his position.
Despite the setback, United Bank plans to revive its move to tag Mallya a wilful defaulter in 2015 by reconstituting Grievance Redressal Cell by strictly adhering to norms that Reserve Bank of India mentioned in its master circular.
And with the finance ministry appointing P Srinivas as the chairman-cum-managing director of the bank on Wednesday, that move would be taken sooner than later.
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