The Delhi High Court has directed the two state-owned banks, Union Bank of India and Indian Overseas Bank to maintain the status quo in a matter pertaining to the classification of accounts of Reliance Communication Ltd. (RCOM) and its subsidiary, Reliance Telecom Ltd. (RTL) as fraudulent.
As per reports, the State Bank of India (SBI), Union Bank of India (UBI), and Indian Overseas Bank (IOB) had marked RCom account as fraudulent.
In addition to that, SBI and UBI have also classified RTL accounts as fraudulent. RTL is a 100% subsidiary of RCOM.
The latest move by the banks comes a couple of weeks after the NCLT Mumbai gave approval to the Reliance Infratel’s Resolution Plan, in the first week of December.
The Reliance Jio’s group company Reliance Digital Platform is the successful Resolution Applicant for Reliance Infratel Ltd. The Lenders will get Rs. 4,400 crore from Reliance Digital.
The Single Judge bench of Justice Subramonium Prasad ordered the banks to maintain the status quo until the next date of hearing, which is January 13, 2021.
However, the court clarified that the Centre is free to issue a show-cause notice to the petitioner and are free to take any steps/investigation/file any complaint proceedings against the petitioners independent of the aforesaid order declaring the account of the two company as a fraud account.
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