38.6c New Delhi, India, Saturday, April 13, 2024
Judiciary

Why aren’t Personal Guarantees of Big Corporate Loan Defaulters invoked by PSBs?: SC questions the Ministry of Finance

By Prachi Misra      24 July, 2020 02:12 PM      0 Comments
Ministry of Finance Supreme Court public sector banks

The Ministry of Finance has been directed by the Apex Court to respond to a petition which claims Rs 1,900 crores are lost every day due to public sector banks not invoking personal guarantees of big corporate loan defaulters.

On Monday, 20th July 2020 a bench headed by Justice Rohinton F Nariman observed that the ministry should reply to the petitioner once representation is made.

The bench told Senior Lawyer Manan Mishra, who appeared in the PIL petitioners in the matter “Your petition has mentioned that the Ministry of Finance itself has, by a Circular, directed personal guarantees issued by promoters/managerial personnel to be invoked. But you claim the public sector undertakings are not complying with this circular. We think you should first go to the ministry.”

Manan Mishra argued based on the statistics that there has been a loss of approximately 1.85Lakhs Crore in a financial year to the public sector banks while they shy away from invoking personal guarantees of the biggest corporate defaulters.

He further added that loans of individuals get recovered easily but it becomes difficult for promoters, chairpersons, and managers of big corporations to get away despite making huge defaults of loans.

At this, the bench said that since the ministry has issued notification for the same, it is better to seek a response from there and then back to the court. 

Manan Mishra accepted the suggestion and requested the bench to issue a specific direction to the ministry for giving its response.

The court agreed and stated “The representation will be made within a period of two weeks from today. The Ministry of Finance is directed to reply to the said representation within a period of four weeks after receiving such representations.”

The Senior Advocate asked for the liberty to come back after the ministry’s reply. Justice Nariman said “Of course it is open to you to come back once they decide. We will hear from you.”

 



Share this article:



Leave a feedback about this
TRENDING NEWS

two-day-conference-on-april-on-technology-and-dialogue-between-sc-and-singapore
Trending Legal Insiders
Two-day conference on April 13-14 on Technology and Dialogue between SC and Singapore

Explore AI's role in law at the India-Singapore Supreme Court conference on technology, enhancing judicial processes and access to justice, April 13-14, 2024.

12 April, 2024 06:16 PM

TOP STORIES

very-disturbed-by-latest-trend-of-lawyers-commenting-on-pending-cases-cji
Trending Judiciary
Very disturbed by latest trend of lawyers commenting on pending cases: CJI

Chief Justice of India urges lawyers to prioritize court and Constitution over political beliefs, expressing concern over trend of commenting on pending cases.

08 April, 2024 11:19 AM
court-rejects-plea-for-interim-bail-to-brs-leader-k-kavitha
Trending Judiciary
Court rejects plea for interim bail to BRS leader K Kavitha

Delhi court rejects interim bail plea for BRS leader K Kavitha in money laundering case related to Delhi liquor scam. ED opposes bail.

08 April, 2024 12:14 PM
centre-questions-growing-tendency-among-states-to-approach-sc-for-funds
Trending Judiciary
Centre questions growing tendency among States to approach SC for funds

The Centre questions the growing trend of states approaching the Supreme Court for funds, citing timing and advocating for resolution through dialogue.

08 April, 2024 03:58 PM
sc-notice-to-centre-on-plea-to-safeguard-interests-of-intersex-children
Trending Judiciary
SC notice to Centre on plea to safeguard interests of intersex children

Supreme Court issues notice to Centre on PIL for safeguarding intersex children's interests and regulating medical interventions. Details inside.

08 April, 2024 04:35 PM

ADVERTISEMENT


Join Group

Signup for Our Newsletter

Get Exclusive access to members only content by email