SC: Make public list of corporate loan defaulters
NEW DELHI: A list of corporate loan defaulters will soon be made public as the Supreme Court directed the Centre on Tuesday to provide a compendium of corporate entities, who owe Rs 500 crore or more to banks, in four weeks. A bench of Chief Justice TS Thakur and Justices A M Khanwilkar and D Y Chandrachud brushed aside the RBI’s objections in October against making public the list of big loan defaulters, which was submitted in a sealed cover.
After perusing the list, the bench in October said it appeared 57 debtors had defaulted on repaying around Rs 85,000 crore. If the loan threshold is lowered below Rs 500 crore, the default amount crosses Rs 1 lakh crore. It is a phenomenal amount. Why should the names of these defaulters not be made public?” the bench had asked.
Petitioner NGO’s counsel Prashant Bhushan has been pitching for ‘naming and shaming’ big defaulters. The SC had asked RBI: “Borrowers have taken money from banks and defaulted in repaying the loan. You call this information confidential? It may affect borrowers but how does making information public affect RBI
The bench of Justices Thakur, Khanwilkar and Chandrachud decided to put an end to ‘sealed cover report’ on big loan defaulters and directed the Centre on Tuesday to file within four weeks “the list of corporate entities where the amount outstanding is in excess of Rs 500 crore”. The court clarified that its direction to the Centre will not have any co-relation with the functioning of the government-appointed committee working on streamlining recovery of defaulted loans.
During the hearing, the SC had taken into consideration big loan defaulters like controversial liquor baron Vijay Mallya, who managed to flee the country after cocking a snook at authorities. Writing the judgment for the bench, Justice Chandrachud said Debt Recovery Tribunals (DRTs) were set up in the country in 1993 after it was found that by mid-1990s, there were 15 lakh cases filed by nationalised banks and financial institutions seeking recovery of over Rs 6,000 crore. Between 1993 and October 2015, the tribunals have disposed of about 1.34 lakh cases leading to recovery of Rs 70,725 crore. At present, over 70,000 cases were pending in DRTs involving recovery of nearly Rs 5 lakh crore.
Please also instruct not to grant further loans to defaulters or their Kith and…
Though recovery of such large amount is at stake, most of the 34 DRTs did not have basic infrastructure and manpower leading to thousands of cases pending for more than 10 years. The bench said the chairperson of Debt Recovery Appellate Tribunal at Allahabad wrote a letter to the CJI on December 9 saying the absence of infrastructure and facilities forced him to resign. The SC said it was symptomatic of each DRT, which suffers from lack of manpower and resources.