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Rediff.com  » Business » Kingfisher should be given loan, other papers by PNB: Court

Kingfisher should be given loan, other papers by PNB: Court

August 27, 2014 18:45 IST

KingfisherThe Delhi High Court on Wednesday said that Punjab National Bank, which has served a notice on Kingfisher Airlines alleging that it has willfully defaulted in payment of dues of over Rs 770 crore (Rs 7.7 billion), should give to the carrier copies of documents relied upon by the bank.

A bench of Justice Vibhu Bakhru, which later decided to hear the matter on Thursday again, also said that the ailing airlines can be allowed to be represented by a lawyer in the proceedings to be conducted by the PSU bank against it.

The counsel for PNB said that airline had been provided with the copy of the loan and other related documents at the the initial stage itself and the demand of the relied upon documents now is a just ‘ploy’ to delay the recovery proceedings.

"In any proceedings, you will have to supply the documents, to be relied upon in drawing an adverse inference, to the other side," the court said.

Earlier, the airlines had moved the court against PNB's notice alleging the carrier has willfully defaulted in payment of outstanding dues of over Rs 770 crore.

The bank has also said in the August 21 notice that if no reply is received within seven days then the airline and its guarantors, United Breweries (Holdings) Ltd (UBHL) and Vijay Mallya would be declared ‘willful defaulters’.

Kingfisher has sought directions to the bank to rescind the notices and also restrain it from taking any action against the airline pursuant to the same.

The petition has also made the Ministry of Finance and the bank as parties in the case.

Central government Standing Counsel Anil Soni and advocate Naginder Benipal on Wednesday appeared for the ministry.

The airline has contended that the bank had denied legal representation to it in the hearings held pursuant to two notices issued last year and it apprehends that the same may happen in connection with the latest notice of August 21.

It has contended that such act of the bank is ‘arbitrary, unreasonable, untenable and unlawful’.

The airline, in its plea filed through advocate Ajay Bhargava, has contended that the August 21 notice ‘for the first time and as a complete after thought has sought to rely on additional alleged facts in support of its decision to classify the petitioner, UBHL and Vijay Mallya as willful defaulters’.

The bank has issued the notices under the July 1, 2013 master circular of Reserve Bank of India which pertains to steps to be taken by commercial banks with respect to non- performing assets.

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