In a decision that could help banks resolve the problem of non-performing assets, the Calcutta High Court has dismissed an appeal filed by Kingfisher Airlines against the United Bank of India..The judgment delivered yesterday by a Division Bench of Justices Jayanta Biswas and Iswar Chandra Das, upheld an earlier order of a single-judge bench, directing KFA’s Directors, including Vijay Mallya, to appear before the bank’s committee..The said committee, a Grievance Redressal Committee, was set up after KFA was identified as possible “wilful defaulters” as mentioned in the RBI circular of July, 2012. In the last week of May, the bank claimed that KFA had defaulted on dues totaling Rs. 400 crores, and requested the directors to appear before the committee..Now KFA claimed that the directors were entitled to legal representation before the committee, while the bank argued that no such provision existed in the RBI circular. Aggrieved, KFA approached the Calcutta High Court through a writ petition that was dismissed by a single-judge Bench on July 10 this year. The single-judge bench held that KFA could use its in-house law officers and company secretary before the committee observing that,.“Even if any or all the officers of the bank comprising the Committee are legally trained persons, the petitioning company does not stand at a disadvantage. It is inconceivable that the petitioning company does not have in its fleet an efficient and well-versed company secretary and/or competent law officers. In the hearing to be conducted by the Committee, reasonably simple questions of fact as to by whom and how the finances of the petitioning company were handled and utilized, and where the funds have gone…….which a company secretary and/or law officers of fair intelligence and having knowledge of the conditions prevailing in the petitioning company would be able to disclose, for unearthing the truth….. the petitioning company can claim no right to be represented by an advocate at the hearing before the Committee.”.It was this order that was upheld by the Division Bench. It is a judgment that gains significance due to the fact that it could speed up the process of identifying wilful defaulters. Speaking to Bar & Bench, VERUS’ Krishnayan Sen, who worked on the matter, said that,.“The judgment will ensure that the process of declaring a defaulter as a ‘wilful defaulter’, as envisaged by the RBI Circular, does not needlessly get embroiled in protracted legal submissions; where the key factual points get lost in legal nuances. The process is not meant to be a lis.”.UBI was represented by lead senior counsel, Hirak Mitra who was advised by VERUS partner Krishnayan Sen and associate Prantar Basu Choudhury. Kingfisher Airlines was represented by senior counsels, Sudipto Sarkar and Siddharta Mitra..Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.
