Delhi High Court has directed the two state owned banks, Union Bank of India and Indian Overseas Bank to maintain the status quo in a matter pertaining to the classification of accounts of Reliance Communication Ltd. ( RCOM) and its subsidiary, Reliance Telecom Ltd. (RTL) as fraudulent.
RCOM and RTL had challenged the recent move by the Union Bank of India and Indian Overseas Bank to mark these accounts as fraudulent.
Hearing the petition, Delhi HC has directed the banks to maintain the status quo and no coercive action till the next date of hearing. The next date of hearing is 13 January 2021.
As per reports, State Bank of India (SBI), Union Bank of India (UBI) and Indian Overseas Bank (IOB) had marked RCOM account as fraudulent.
In addition to that, SBI and UBI have also classified RTL account as fraudulent. RTL is a 100% subsidiary of RCOM.
Another RCOM subsidiary, Reliance Infratel Ltd.'s account has also been marked as fraudulent by the SBI.
The latest move by the banks comes couple of weeks after the NCLT Mumbai gave an approval to the Reliance Infratel's Resolution Plan, in the first week of December.
Reliance Jio's group company Reliance Digital Platform is the successful Resolution Applicant for Reliance Infratel Ltd. The Lenders will get Rs. 4,400 crore from Reliance Digital.
Reliance Infratel has 43,000 towers and 172,000Kms fiber. The Resolution Plan of RCOM and RTL is pending for an approval before the NCLT Mumbai since March 2020. The lenders will recover around Rs. 18,000 crore from the sale of these two companies to the UV Asset Reconstruction Company, which is the successful Resolution Applicant.