After Union Bank, IOB, Delhi HC Directs SBI, RBI To Maintain Status Quo On Classification Of Anil Ambani's RComm, Reliance Telecom Accounts
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About a week after Union Bank of India and Indian Overseas Bank, State Bank of India and the Reserve Bank of India have been directed by the Delhi High Court to maintain status quo on the classification of Anil Ambani's Reliance Communication Ltd's and Reliance Telecom Ltd's accounts as 'fraudulent' until Jan 13, 2021.Issuing notice on a plea towards the same by Punit Garg, non-executive...
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About a week after Union Bank of India and Indian Overseas Bank, State Bank of India and the Reserve Bank of India have been directed by the Delhi High Court to maintain status quo on the classification of Anil Ambani's Reliance Communication Ltd's and Reliance Telecom Ltd's accounts as 'fraudulent' until Jan 13, 2021.
Issuing notice on a plea towards the same by Punit Garg, non-executive director of Reliance Communication, the Delhi High Court passed an order similar in nature to the one passed earlier on 28.12.2020.
The court has however said that the Banks would be free to investigate, issue show cause notice, and file any complaints against the companies independent of the current order of the court.
The petition has been described by the court earlier as being similar in nature to petitions which have been filed before the court challenging the vires of RBI's Master Circular 1.07.2016, updated as on 3.07.2017. The circular lays down guidelines and directions for the declaration of accounts as fraudulent. It has been challenged for alleged violation of principles of natural justice as it allows banks to unilaterally declare accounts as fraudulent without affording the parties any notice or prior communication in this regard.
The counsels reiterated this today, and said that relief had been granted to the petitioners challenging the vires of the circular earlier.
The banks have been directed to file their replies by Jan 11, and the matter has been listed for further hearing on Jan 13.