INSUBCONTINENT EXCLUSIVE:
clarity on whether the ongoing resolution process by lenders would be stalled, which is seen as damaging for the already troubled projects
Lenders to power sector are contemplating whether going ahead with the resolution proceedings will amount to contempt of court.
The order on
Status quo, as of today, shall be maintained in the meantime
proceedings have got nothing to do with the RBI circular
The mandate to lenders to do something though the circular is challenged
Therefore, there will be status quo as far as the RBI circular is concerned for these projects which were the subject matter of the transfer
Lenders were forced to do something, now they are not being forced
proceedings since it is a status quo
But in case the existing promotors have agreed to the resolution plan, we can implement them
there are conflicting views on the implementation of resolutions since the apex court order is silent on the extension of the 180-day period
for completing the resolution plan.
Banks, members of the Association of Power Producers, Independent Power Producers Association of India,
South Indian Sugar Mills Association along with groups representing shipyards and textile makers had welcomed the order on Tuesday saying it
prevented their stressed assets from insolvency court.
Vishrov Mukherjee, partner at J Sagar Associates, which advised and represented
Association of Power Producers, GMR and RattanIndia before the Allahabad High Court and Supreme Court in challenging the RBI circular on
stressed assets, said the status quo will extend to parties before the Supreme Court including members of various associations including
financial institutions are unclear as to whether they can go ahead with ongoing resolution processes given that the cut-off date under the
12th Feb Circular was August 27
Given that the IBC route mandated by RBI is foreclosed for the time being, it is important for the RBI provide clarity so as to enable
lenders to continue with the resolution process within the framework of the February 12 circular
