Delhi HC Issues Notice In Indiabulls Housing Finance Ltd's Plea Challenging Downgrading of Credit Rating [Read Order]

The Single Bench of Justice Sanjeev Sachdeva has issued notices to Securities Exchange Board of India, and ICRA Limited.

ICRA Limited is an Indian independent and professional investment information and credit rating agency.

As per the plea, ICRA Limited has downgraded Petitioner's credit rating directly or indirectly in view of circular issued by the Securities and Exchange Board of India (SEBI) dated 30.03.2020.

Appearing for the Petitioner, Senior Advocate Rajiv Nayyar argued that in light of the ongoing nationwide lockdown and advisories issued by the government, there is an emergent situation due to which necessary requisite details as sought by ICRA in their emails could not be provided.

Mr Nayyar further submitted that in terms of the advisory dated 30.03.2020 issued by SEBI there is relaxation from compliance with certain circulars issued, due to COVID-19 pandemic and the moratorium permitted by RBI.

He submitted:

'Instead of giving further time to the petitioner to respond and complying with the circular issued by SEBI, ICRA is threatening to go ahead with the credit review and is proposing to downgrade the credit rating of the Petitioner which is likely to have serious negative impact on the financial standing of the petitioner and there is a likelihood that the debenture holder may call for immediate redemption of the debentures of the Petitioner, thereby causing financial stress.'

The court has asked the Petitioner to intimate both the respondents about the issuance of the notice.

Meanwhile, the court has restrained ICRA from uploading any decision with regard to the credit rating of the Petitioner on its website or giving effect to it till the next date of hearing.

The matter will next be taken up on April 06.

The Petitioner in this case was represented by Senior Advocates Rajiv Nayyar and Kartik Nayyar.

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