NCLAT removes stay on Reserve Bank of India action against Srei group

NCLT had passed an order preventing regulatory authorities from taking any coercive steps against the company

The National Company Appe­llate Law Tribunal (NCLAT) has granted a stay on the Kolkata Bench of National Company Law Tribunal’s (NCLT’s) order that barred the Reserve Bank of India (RBI) from taking any coercive step against Srei group.
 
The RBI had moved NCLAT against the NCLT’s order. And, in an ad-interim order, the NCLAT said, “We are of the view that if the operation of the aforesaid direction is stayed it will not prejudice the proceedings pending before the tribunal. Therefore, we deem it appropriate to pass ad-interim ord­er. In Paragraph 34 of the impugned order following direction is stayed till the pendency of this appeal.”
 
Paragraph 34 of the impugned order of Kolkata Bench of the NCLT read, “All governmental or regulatory authorities shall be stopped from taking any coercive steps, including reporting in any form and/or changing the account status of the firm”
 
The RBI had argued that the tribunal has exceeded its jurisdiction while passing such an order and prevented the statutory body to act as regulatory authority. 
 
The NCLAT observed that the scope of RBI’s appeal is limited to the extent that whether the tribunal while exercising the jurisdiction under Section 230 of the Act, can pass aforesaid directions against the RBI.
 
The NCLT’s Kolkata Bench had granted Srei group a moratorium on repayments. The order said, “.....in the meantime till further orders, the creditors (including representative security or debenture trustees) of the applicant company covered under the scheme shall maintain status quo with respect to their respective contractual terms dues claims and rights and the creditors (including security or debenture trustees)”.