HC rejects firm’s petition against IFIN’s decision to declare 100 crore loan as NPA

The bench comprising Justice Nitin Jamdar and Justice Milind Jadhav refused to believe in Wavell’s claim that it was a victim of the loan scam at IL&FS group.
File photo: Bombay High Court.(Girish Srivastava/HT)
File photo: Bombay High Court.(Girish Srivastava/HT)
Updated on Oct 31, 2020 02:03 PM IST
Copy Link
Hindustan Times, Mumbai | ByKanchan Chaudhari | Edited by Sparshita Saxena

The Bombay High Court on Thursday rejected petition filed by Wavell Investments Private Limited, challenging the decision of IL&FS Financial Services Ltd (IFIN) to declare it’s 100 crore loan account as a non-performing asset (NPA).

The bench comprising Justice Nitin Jamdar and Justice Milind Jadhav refused to believe in Wavell’s claim that it was a victim of the loan scam at IL&FS group and that the petitioner company was used to route the amount from IFIN to an IL&FS Transportation Networks Ltd. and the entire amount was passed on to the IL&FS group company.

Wavell further claimed that since the loan account was wrongly declared to be an NPA, it was also entitled to the benefit of six-month moratorium extended in view of Covid-19 pandemic.

The claim of innocence, however, failed to impress upon the HC. The bench said the claim can be examined from a common-sense point of view.

“No prudent commercial entity would enter into a transaction of such a large amount without making necessary enquiries regarding bonafide and legality of the transactions,” said the bench.

Also read: ‘BJP’s Covid-19 vaccine promise not a poll violation,’ says EC

The judges said the petitioner claimed to have suffered a loss in this transaction. “The obvious question arises why then the petitioner chose to be part of the transaction? Why would a commercial entity enter into a transaction of 100 crore and then suffer loss willingly,” the judges asked.

“The petitioner’s behaviour is contrary to ordinary commercial prudence. It is not possible to believe that the petitioner was not aware of the implications of the transactions,” said the bench.

The HC also took into consideration that the interim forensic audit report of February 2019 has indicated that loans worth about 2,270 crore were routed to IL&FS group companies through third parties like the petitioner and the exact role played by these third parties was still unclear.

“Considering the totality of the circumstances, the simplistic foundation of the petitioner’s case cannot be accepted. We are not convinced of the bonafide of the petitioner as asserted in the petition,” the HC said while refusing to exercise its extraordinary jurisdiction.

SHARE THIS ARTICLE ON
Close Story
SHARE
Story Saved
OPEN APP
×
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Thursday, December 02, 2021