Financial Daily from THE HINDU group of publications
Friday, Oct 17, 2003
Financial Daily from THE HINDU group of publications Friday, Oct 17, 2003 |
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Non-Performing Assets Money & Banking - Private Banks Repay 25 pc to ICICI Bank by Oct 21, DRT tells Mardia Chemicals Poornima Mohandas
Mumbai , Oct. 16 THE Debt Recovery Tribunal of Mumbai has issued an order to Mardia Chemicals to pay up 25 per cent of the outstanding amount to ICICI Bank by October 21, 2003. This works out to roughly Rs 98 crore. Only after this amount is paid to ICICI Bank, the Debt Recovery Tribunal III (DRT III) will take up the affidavit-cum-reply filed by Mardia Chemicals in its defence. The company in its affidavit says that it cannot pay the whole outstanding amount since it has not fallen due yet. The repayment of the five loans availed of, is over an eight-year period. The DRT III in its order states, "The affidavit-cum-reply is accepted subject to deposit of 25 per cent of the outstanding amount with the applicant bank, within fifteen days. The amount so deposited be adjusted towards the outstanding.'' It further adds, "... it appears that the defendants are trying to protract the proceedings by filing one or another application.'' When contacted said Mr Rasiklal Mardia, Chairman & Managing Director, Mardia Chemicals Ltd, "I'm not aware of any such DRT order and if it is true I will challenge it.'' Meanwhile according to him, the Division Bench of the Mumbai High Court has issued an order to the DRT to hear both the cases i.e., one of that of ICICI Bank for the recovery process and the other by himself with a counter-claim together. The DRT order comes even as the Mardia Chemicals case against ICICI Bank's attempts to seize and sell its assets, is scheduled to come up for hearing in the Supreme Court on October 31. The case was earlier scheduled for hearing on October 17, which has now been postponed to the end of the month. The company owes Rs 1,450 crore (including principal of Rs 800 crore and balance unpaid interest) to 22 lenders, including Bank of Baroda, Bank of India, Corporation Bank, Union Bank, IDBI, Life Insurance Corporation, IFCI and New India Assurance. The exposure of ICICI Bank to the Ahmedabad-based, dyes and dyes intermediaries company, is Rs 110 crore (principal amount) and with interest works out to Rs 392 crore. The Supreme Court hearing on the case is expected to pronounce decisions on the time frame banks can adopt between serving a notice to a defaulter, seizing assets and sale to realise their value and protection measures to defaulting borrowers of small amounts. In November 2003, just two days after Parliament passed the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Bill 2002, ICICI Bank took over a unit of Mardia Chemicals, located at Vatwa in Ahmedabad. The private sector bank had issued a notice in July to Mardia and on expiry of the required 60-day period, it took over the assets of the closed unit in consultation with all lenders.
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