New Delhi : The Supreme Court on Tuesday asked the Reserve Bank of India to furnish a list of companies which have defaulted on bank and financial institution loans in excess of Rs.500 crore, or whose loans have been restructured under corporate debts restructuring scheme.
“You lend money, you know it will not come back, and then declare it as bad loans. We want the list of major defaulters who run empires and yet default — SC BENCH
While asking the RBI to file an affidavit, a bench of Chief Justice T.S. Thakur, Justice R. Banumathi and Justice Uday Umesh Lalit directed that the list be furnished to it in a sealed cover after one of the counsel told the court that the matter impinges on commercial confidentiality of the companies.
“You lend money, you know it will not come back, and then declare it as bad loans,” the court told Solicitor General Ranjit Kumar, who, seeking to shift the blame on the previous UPA government, said: “That had happened in the last ten years. As a result the economy is not growing; we don’t have the money to pay.”
Noting that default in payment of bank loans happens in other countries as well and it was part of the economic process, the court said that the banks should be vigilant in recovering the loans.
The court order came in the course of the hearing of a public interest litigation pointing to loans given by HUDCO in 2003 to some of the companies with questionable track records.
Addressing the court, Pra-shant Bhushan, appearing for NGO Centre for Public Interest Litigation, told the court that there is a vicious circle and the mortgaged assets of a defaulting company often again go back to it when those assets are auctioned to recover bad loans.
He told the court that the Central Information Commission had passed nine orders in nine cases, directing disclosure of defaulters’ identity and each time the commercial confidentiality clause is invoked to block the information by the banks.
Bhushan told the court that the apex court by its December 16, 2015, order had said that the banks and their apex regulatory body, the RBI, could not withhold information on defaulters, losses and alleged illegalities of the banks by invoking the exception under the Right to Information Act.
He said that this verdict had not yet been complied with.