The Hindu Business Line : Vindicates our stand on deposit issue: Mardia

THE man who dons the dubious tag of the Indian banking industry's leading defaulter, Mr Rasiklal S Mardia has always had a penchant to view things differently.

Even as the Supreme Court upheld the validity of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act allowing banks to takeover and dispose of assets of companies defaulting on loans, Mr Mardia claimed it was a clear victory for him as it struck down one of the most dangerous features of the Act.

As per section 17 (2) of the Act, it was mandatory for the borrower to first deposit 75 per cent of the amount claimed by the lender before being given a hearing at the Debt Recovery Tribunal (DRT). Mr Mardia said the Supreme Court had struck down this provision, giving a breather to the corporate borrowers.

The Supreme Court ruling was on a petition challenging the validity of the Act filed by Mardia Chemicals Ltd against the Government of India and banks. Talking to Business Line, Mr Mardia, whose group company dues stood at Rs 1,404 crore, said that his problem was with this one provision of the Act as it was unconstitutional. This view has been upheld by the Supreme Court he said, adding that the Court ruling was a victory for the borrowers and not as much for the banks. "The Securitisation Act had sought to debar the borrowers from approaching any court of justice. The Bill was loaded heavily in favour of the lender as the borrowed could go in for appeal with the DRT only after depositing 75 per cent of the amount claimed by the lending institutions. Now, the Supreme Court has restored the legal rights of the borrower," Mr Mardia said.

Earlier, Mr Mardia had said that he was challenging the Securitisation Act, as unchallenged, it would have led to an unhealthy control of the industry by the money lending institutions. And now, with the Apex Court ruling that the defaulting companies should be given a chance to go in appeal with the DRT minus the baggage of a 75-per cent pre-conditional deposit, Mr Mardia feels he has an even chance with his counterclaim against the ICICI Bank.

"While the ICICI Bank has a claim of some Rs 400 crore against Mardia Chemicals, there are two counterclaims of Rs 5,600 crore and Rs 2,200 crore that are pending from our side against them. Now, the DRT will hear all these claims simultaneously. Moreover, a borrower like me can henceforth go the full distance — DRT, ADRT, High Court and Supreme Court. The judiciary will no longer be kept out of the lender-borrower relationship by making it mandatory for the former to deposit a huge amount, some Rs 300 crore for me against ICICI, before getting a fair hearing," he said.

More Stories on : Non-Performing Assets | Courts/Legal Issues | Securitisation

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