The Supreme court on Friday said it would commence from November 28 hearing on a batch of petitions contesting February 12, 2018, Reserve Bank of India 's circular spelling revised framework for initiation of insolvency proceedings against defaulting companies without any delay.
The bench of Justice Rohinton Fali Nariman and Justice Navin Sinha said the hearing on a batch of petitions by companies belonging to power, sugar textile, I.T., Shipping and other sectors would commence on November 28.
Asking all the parties to complete their paperwork before the final hearing on November 28, Justice Nariman said they will not entertain any plea for adjournments.
The RBI had brought the revised framework for speedy resolution of non-performing assets (NPAs), or bad loans, by harmonising existing guidelines with the norms specified in the Insolvency and Bankruptcy Code (IBC), 2016.
Under the revised framework, banks were required to identify initial stress in loan accounts, immediately on default, by classifying stressed assets as special mention accounts (SMA) depending upon the period of default.
The central bank had said that all lenders would be required to put in place Board-approved policies for resolution of stressed assets, including timelines for resolution.
"As soon as there is a default in the borrower entity's account with any lender, all lenders - singly or jointly - shall initiate steps to cure the default," the notification had said.
On the implementation of the resolution plan, the RBI had said: "The resolution plan (RP) may involve any actions/plans/reorganisation including, but not limited to, regularisation of the account by payment of all over dues by the borrower entity, sale of the exposures to other entities/investors, change in ownership, or restructuring."
The revised guidelines had also laid down the timelines for resolution of stressed assets.
If a resolution plan in respect of large accounts is not implemented as per the timelines specified, lenders were required to file insolvency applications, singly or jointly, under the IBC within 15 days from the expiry of the specified timeline, said the revised framework.
Besides, all lenders were required to submit a Central Repository of Information on Large Credits (CRILC) on all borrower entities in default with aggregate exposure of Rs 50 million and above.
The notification had said all accounts, including those where any of the schemes have been invoked but not yet implemented, would be governed by the revised framework.