Power NPAs- SC transfers all pleas challenging RBI notification to itself
Besides 34 stressed power assets, shipping and sugar companies had also sought relief from the RBI notification
In a temporary relief to stressed assets, the Supreme Court on Tuesday asked banks not to refer any case for insolvency under the February 12 circular of the Reserve Bank of India (RBI) for the next two months.
The apex court also transferred to itself all cases challenging the notification. The next hearing has been fixed for November 14.
Besides stressed power assets, shipping and sugar companies had also sought relief from the RBI notification. Among the petitioners were Punj Lloyd, the South Indian Sugar Mills Association-Tamil Nadu, Dharani Sugar & Chemicals, the Shipyards Association of India, and the All India Bank Officers’ Confederation.
Stressed companies would have headed to the National Company Law Tribunal (NCLT) since the RBI notification required the lenders to refer the defaulting cases for insolvency within 15 days of the expiry of 180 days from March 1, 2018. The 15-day period ended on Tuesday.
Nine of the 34 stressed thermal power assets were nearing a resolution outside the NCLT. These will be the ones which will benefit the most from the apex court ruling. A senior executive of State Bank of India said the effort to resolve NPAs outside the Insolvency and Bankruptcy Code (IBC) would continue for power companies. SBI’s Sashakt scheme will provide the platform to do this.
Essar Power, RKM Power, IL&FS, GMR Energy, Rattan India and KSK Mahanadi had filed cases in various high courts against the RBI circular after an Allahabad High Court order on August 27 did not grant any relief on petitions filed by industry associations.
“The order has provided a great relief to stressed assets in the power sector. This would provide time for bankers to finalize resolution plans for projects of about 13 GW in their final stages and the High-Level Empowered Committee to submit its report on corrective actions,” said A K Khurana, director general, Association of Power Producers.
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