SIDBI can't raise demands towards due instalment from ICCL until RBI clarification: Delhi HC

Delhi High Court has said the Small Industries Development Bank of India (SIDBI) will not raise any further demand on Indiabulls Commercial Credit Limited towards the due instalments until it obtains clarification from the RBI.

Justice Rekha Palli made the observation while disposing of a petition filed by Indiabulls Commercial Credit Limited (ICCL), a non-banking financial company (NBFC), which sought directions to the SIDBI to comply with the circular dated March 27 and a consequent direction restraining the SIDBI from recovering any amounts during the moratorium imposed by the RBI.

The petitioner told the court that the petitioner company had entered into a loan agreement with the SIDBI whereunder the SIDBI had agreed to disburse a loan amount not exceeding Rs 750 crore to the petitioner and pursuant thereto disbursed a sum of Rs 575 crore to it.

The NBFC had been repaying the loan amount in instalments as agreed between the parties and has never been a defaulter.

According to the petition, the RBI had, in a March 27 circular, given temporary relief to the borrowers across the country and given the liberty to all banks to allow moratorium of three months on payment of instalments in respect of all term loans outstanding as on March 1, subject to the borrower making the said request.

"Having considered the submissions of the counsel for the parties, even though despite service the RBI is unrepresented, in the light of the SIDBI's own stand that they are awaiting a clarification from the RBI as also the position that the payment under the impugned communication is purported to have already been received by SIDBI, nothing survives for adjudication in the present petition and the same is accordingly is disposed of as infructuous with the clarification that the SIDBI will not raise any further demand on the petitioner," the court said in its order issued on Thursday.

The petitioner submitted that despite the issuance of the said circular, the SIDBI on April 3 raised the impugned demand towards the instalment payable in April.

The petitioner, therefore, made a request to SIBDI for grant of the moratorium for a period of three months, in response whereto, the SIDBI had while stating that they are awaiting clarifications from the RBI, as to whether the circular will be applicable to the NBFC.

ICCL said that SIDBI directed them to make the payment towards the instalment due in April. SIDBI told the court that it is is still awaiting necessary clarification from the RBI.