Bombay High Court Rejects Pvt Company's Plea Challenging Declaration Of Account As NPA By IL&FS Subsidiaries
3 nov 2020
A division bench of Justice Nitin Jamdar and Justice Milind Jadhav of the Bombay High Court has rejected a writ petition filed by Wavell Investments Private Limited against declaring a loan account as Non-Performing Asset over a 100 crore loan taken from two subsidiaries of IL&FS, IL&FS Financial Services Limited (IFIN) and IL&FS Transportation Network Limited (ITNL).
The company had entered three loan agreements with these subsidiaries, and the Court noted that its conduct is contrary to ordinary commercial prudence.
The Petitioner argued that since there was a delay in classifying the account as Non-Performing Asset, and as the petitioner company believed that NCLT or NCLAT would decide on the issue, they should not be liable to pay back the Rs.100 crore loan.
The Court rejected the petition and stated that it is hard to believe that the Petitioner was so naïve that it relied on assurances and was unaware of the implications of the transactions.