Hyderabad: Justice K. Lakshman of the Telangana High Court dismissed a writ petition filed by Nagarjuna Fertilisers and Chemicals Ltd (NFCL)., against ICICI Bank Ltd.
According to the petitioner, the bank had demanded an outstanding amount of Rs 314.862 crore; failure to do so would result in enforcing the securities. NFCL said it had invested in the manufacture of primary urea but supply of gas was disrupted which led to huge losses and sought force majeure (unforeseeable circumstances preventing it from fulfilling a contract.).
On a detailed analysis, the judge recorded that NFCL had failed to make multiple payments and had “committed various breaches of other terms and conditions”. Justice Lakshman referred to circulars issued by the RBI on the methodology of executing Corrective Action Plan (CAP) and noted that NFCL had availed the CAP term loan but was in default.
The judge rejected the plea that the writ petition was not maintainable against a private bank since the court had to examine whether or not a private bank failed to comply with statutory obligations cast on it by the RBI. On facts. Justice Lakshman rejected the NFCL plea.
