With lenders likely to move the National Company Law Tribunal (NCLT) against stressed power assets in the country after September 11, as per a circular issued by the Reserve Bank of India (RBI), two power producers in Tamil Nadu have approached the Madras High Court seeking interim injunction restraining the banks from doing so.
Petitions by IL&FS Tamil Nadu Power Company Ltd against RBI and others, and RKM Powergen Pvt Ltd against Power Finance Corporation Ltd and others, came up for hearing on Monday before Justice R Mahadevan. RBI's deadline for the resolution of the non-performing assets as per a circular on February 12, 2018, is coming to an end on Tuesday, after which the banks would start moving to NCLT for recovery of the bad assets.
IL&FS Tamil Nadu Power Company argued that the company, with two 600 Mw units, has been looking at restructuring debt and that it is not a loan defaulter as it is regularly servicing the debt. The company sought an interim injuction against the lenders approaching the NCLT tomorrow.
Senior Counsel appeared for RBI argued that an interim stay would impact the procedures across the country and there are various petitions filed in various Courts against the same circular of the central bank. He added that the RBI has taken steps to request the Supreme Court to club all litigation on the same matter for hearing in one Court.
The Judge, hearing the arguments, adjourned the matter to Tuesday.
In another petition, RKM Powergen said that most of its loans are from Power Finance Company, while around 15 per cent are from other lenders. The senior counsel appearing for the company argued that while RBI issued the circular in February, there was a delay in issuing the list of credit rating agencies and this has delayed the whole process by several days. It has also argued that lenders in a recent meeting been positive about the company's loan restructuring activities.
The Judge asked the company to make RBI a party to the matter as well, and adjourned the matter for hearing in a week's time.