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Classification of RComm, Reliance Telecom Accounts As Fraudulent: Delhi High Court Directs Union Bank, Indian Overseas Bank To Maintain Status Quo

first_imgNews UpdatesClassification of RComm, Reliance Telecom Accounts As Fraudulent: Delhi High Court Directs Union Bank, Indian Overseas Bank To Maintain Status Quo Shreya Agarwal29 Dec 2020 1:56 AMShare This – xOn a plea by Anil Ambani’s Reliance Communication Ltd (RComm) and Reliance Telecom Ltd (RTL) against the declaration of their accounts in the Union Bank of India (UBI) and the Indian Overseas Bank (IOB) as “fraudulent”, the Delhi High Court has ordered the banks to maintain status quo until the next date of hearing, i.e. Jan 13, 2021. However, the court has said that the Centre through…Your free access to Live Law has expiredTo read the article, get a premium account.Your Subscription Supports Independent JournalismSubscription starts from ₹ 599+GST (For 6 Months)View PlansPremium account gives you:Unlimited access to Live Law Archives, Weekly/Monthly Digest, Exclusive Notifications, Comments.Reading experience of Ad Free Version, Petition Copies, Judgement/Order Copies.Subscribe NowAlready a subscriber?LoginOn a plea by Anil Ambani’s Reliance Communication Ltd (RComm) and Reliance Telecom Ltd (RTL) against the declaration of their accounts in the Union Bank of India (UBI) and the Indian Overseas Bank (IOB) as “fraudulent”, the Delhi High Court has ordered the banks to maintain status quo until the next date of hearing, i.e. Jan 13, 2021. However, the court has said that the Centre through its investigating agencies, will be free to “take any steps/investigate/file any complaint proceedings against the two companies independent of the order” which declares the account as fraud accounts.The petition, which was being heard by the Vacation Bench of Justice Subramonium Prasad, has been filed through the former Executive Director of RComm, Punit Garg.The court said that the issues raised by the petition are similar to those raised by a batch of writ petitions i.e. W.P.(C).306/2019 etc. wherein the vires of the RBI Circular RBI/DBS/2016-17/DBS.CO.CFMC.BC.No.1/23.04.001/2016-17 dated 01.07.2016 updated as on 03.07.2017 was challenged. The circular in question was described by RBI as the Master Circular on ‘Frauds – Classification and Reporting’, laying down “Master Directions” issued under Section 35 A of the Banking Regulation Act, 1949.The court has also said that the Banks are free to issue a show cause notice to the companies, and thereafter give a necessary hearing in the matter.While action against RComm has been reportedly taken by SBI, UBI, and IOB, RTL, which is a fully owned subsidiary of RComm, has been placed under the radar by SBI and UBI.The woes of Anil Ambani’s group of companies have been ongoing for a while now with another subsidiary, Reliance Infratel, undergoing insolvency proceedings and also being marked as fraudulent.While Infratel is being bailed out through the insolvency resolution process by brother Mukesh Ambani’s Reliance Digital Platform (a group company of Reliance Jio) for Rs. 4400 crores, Anil Ambani also faces personal insolvency proceedings as guarantor to loans by SBI worth Rs.1200 crores to RComm and Infratel, which were stayed by the Delhi High Court upon his challenge.The Supreme Court, in September, had dismissed SBI’s appeal against the Delhi High Court order however, the government is resolute upon allowing invocation of the personal guarantee and plans to challenge Ambani’s stand, as per sources.Click Here To Download Order[Read Order]Subscribe to LiveLaw, enjoy Ad free version and other unlimited features, just INR 599 Click here to Subscribe. All payment options available.loading….Next Storylast_img read more