Contempt Petitions Filed Before Supreme Court For Alleged 'Wilful Violation' Of SC's Order On Non- Declaration Of NPAs

Supreme Court has been moved by two Companies seeking punishment to contemners for flouting the top Court's order dated 3rd Sept 2020 whereby it had declared that " accounts which were not declared NPA till 31st August 2020 shall not be declared NPA till further orders "The petitions have been filed by Advocate Vishal Tiwari and Advocate Abhigya. The plea has sought issuance of notice to the contemnors for having wilfully violated the order and directions dated 3rd Sept 2020 passed by the Supreme Court, punish the contemnors for having committed contempt of the top Court. The plea filed by Aslam Trading Company has impleaded as respondents, Mr Shaktikant Das, the Governor of Reserve Bank of India, Mr Sunil Mehta, Chief Executive of Indian Banks Association and the Chief Manager of Canara Bank. The plea by Tarun Polymers has as respondents Mr Shaktikant Das, the Governor of Reserve Bank of India, Mr Sunil Mehta, Chief Executive of Indian Banks Association and Mr Shashi Ranjan Giri, the Authorised officer of Indian Bank Allahabad. The plea has stated that Supreme Court had passed a common order in batch of petitions on 3rd September 2020 whereby the court had directed and declared that the accounts which were not declared NPA till 31st August 2020 shall not be declared NPA till further orders The plea has cited the top Court's direction whereby the Court had noted that " "Upon hearing the counsel the Court made the following ORDER : At the request of the Mr. Tushar Mehta, learned Solicitor General, the matter is adjourned for 10.09.2020. Mr. Harish Salve, learned Senior Advocate, submitted that no account shall become NPA at least for a period of two months. In view of the above, the accounts which were not declared NPA till 31.08.2020 shall not be declared NPA till further orders."The petitioner, Aslam Trading Company has stated that it was granted by the Bank from time to time, various credit facilities by way of financial assistance against various assets creating security interest in favour of the Bank. The instalments of the loan were being paid regularly and his account was not turned NPA till 31st August 2020. However, on 30th April 2021, a Demand Notice under section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 to Aslam Trading Company demanding an amount of Rs. 1, 84, 23,701.35/- as on 30th April 2021 inclusive of interest up to 30th April. Similar notice was issued to Tarun Polymers by the Bank on 9th April 2021 demanding an amount of more than 5 crores as on 31st March 2021 inclusive of interest upto 31st March. The pleas have stated that both Aslam Trading Company and Tarun Polymers were unilaterally classified as NPA by the respondents on 12th November 2020 and 28th Sept 2020 respectively, under section 13 (2) of the SARFAESI Act. However, no Show cause Notice was given. Further, it's been stated that the Demand Notice along with such demand for the defaulted amount provided with the threat of recovering the possession of the petitioners if within 60 days of the Notice the payment was not made by the Petitioner. The pleas have argued that despite Supreme Court's stay order dated 3rd September 2020 which was passed in presence of all respondents, thereby making them aware of the order, the Respondents continued to proceed under the SARFASAI Act and deliberately flouted the Court's order causing a big damage and loss to the petitioners. According to the petitioners, the stay order was passed in the pandemic COVID19 in the benefit of stressed borrowers so that they shall not suffer in present financial crises during the pandemic. Considering the slump in the petitioners' work, the Stay order was operating as the lifesaving Drug to them but the contemptuous act of the Respondents has brought a major setback to them making their survival critical. The petitioners have argued that the contemptuous act of the Respondents has not only disobeyed the courts order but has also caused a severe irreparable damage and loss to the petitioners. "The petitioner has lost his image and has been defamed as the possession Notice was published in the new papers of his locality which made the dignity of the petitioner lower." The pleas state According to the petitioners the contemptuous act of the Respondents has shaken the confidence of the public and has degraded the trust of the borrowers, and is very disgraceful and contemptuous. Supreme Courts 3rd September order: Supreme Court bench of Justices Ashok Bhushan, R. Subhash Reddy & MR Shah had through its order, protected those accounts from being declared as Non-performing Assets (NPAs) which were not classified as NPAs on August 31 till case was disposed off. The Court was hearing plea(s) seeking extension of the Covid19 induced loan moratorium & waiver of accruing interest. While...

Contempt Petitions Filed Before Supreme Court For Alleged 'Wilful Violation' Of SC's Order On Non- Declaration Of NPAs

Srishti Ojha

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