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TMI Blog2019 (1) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... case. The directions of the Reserve Bank of India also suggest that the Reserve Bank of India never intended to interfere with the statutory remedy of resolution process under the ‘I&B Code’. Those Circulars also cannot override the provisions of the ‘I&B Code’. The right of the Creditors under the ‘I&B Code’ for initiation of ‘Corporate Insolvency Resolution Process’ is a statutory right. The ‘I&B Code’ is a special enactment passed by the legislature and is a complete Code in itself. The Adjudicating Authority needs only to be satisfied of the existence of a debt and default if any. Once the Adjudicating Authority is satisfied, and the application is complete, then the application is required to be admitted. In the present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies to initiate insolvency resolution process in respect of a default under the provisions of the I B Code . According to him, the default has the same meaning as defined in Section 3(12) of the I B Code . 4. Referring to Section 35AB (1) of the Banking Regulation Act, 1949 , it was submitted that the same confers power upon Reserve Bank of India to issue directions to the Banking Companies for resolution of stressed assets. 5. Learned counsel for the Appellant submitted that in exercise of power under Section 35AB, the Reserve Bank of India has issued three directions which, according to him, are for the following objectives: i. On 22nd May, 2017 :- Under Clause 5 whereof the Reserve Bank of India is working on a frame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for implementing the resolution plan to ensure calibrated, time bound resolution of all such accounts in default. Under Clause 13, the aforesaid arrangement would not be available for borrowers where specific instructions have been issued by the Reserve Bank of India to the Banks for reference under the I B Code but lenders have been allowed to continue to pursue such cases as per earlier instructions. There is no specific instruction issued regarding the present case which falls under Clause 12 . Under Clause 20, it is made clear that the guidelines are issued in exercise of powers conferred under Sections 35A, 35AA and 35AB of the Banking Regulation Act, 1949 and Section 45 L of the Reserve Bank of India Act, 1034. 6. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned counsel appearing on behalf of the State Bank of India submitted that 12th February, 2018 Circular is not applicable for filing an application under Section 7 of the I B Code . According to him, the 12th February, 2018 Circular specifically notes that the timelines specified in the Circular are only upper limits and that the Banks are free to invoke the provisions of the I B Code prior to the time-limits indicated in the said Circular. 10. Similar plea has been taken with regard to earlier Circular of June, 2017. 11. We have heard learned counsel for the parties and perused the records. 12. Section 35 AA of the Banking Regulation Act, 1949 empowers the Central Government to authorize the Reserve Bank of India to issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of India issued a directive bringing the following changes to the existing regulations which deals with stressed assets. Clauses 5 and 6 are as follows: 5. The Reserve Bank is working on a framework to facilitate an objective and consistent decision making process with regard to cases that may be determined for reference for resolution under the IBC. Reserve Bank has already sought information on the current status of the large stressed assets from the banks. The RBI would also be constituting a Committee comprised majorly of its independent Board Members to advise it in this matter. 6. The current guidelines on restructuring are under examination for such modifications as may be necessary to resolve the large stressed assets ..... X X X X Extracts X X X X X X X X Extracts X X X X
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