Wednesday, February 28, 2007

SC orders Chand’s firm to repay Rs 57 crore

Overruling its controversial judgment in the Mahalaxmi Sugar Mills case that curtailed the authority of the Credit Information Bureau (CIB) to put any firm in its blacklist, the Supreme Court today directed a sugar mills to pay back Rs 57 crore to banks.
A division bench of Justices Min Bahadur Rayamajhi and Sharada Shrestha directed the Basuling Sugar Mills owned by Arun Chand, son of former prime minister Lokendra Bahadur Chand, to pay back the banks’ loan.The bench also said that the court cannot remove the Mills from the blacklist as the CIB had the authority to blacklist any willful defaulter firm.
According to a lawyer of the Nepal Rastra Bank, the central bank had directed the CIB to blacklist Chand’s firm as it had not paid back the loans even after several directions by the banks and financial institutions which had given the firm loans.
The firm had taken the loan from the Rastriya Banijya Bank, Nepal Bank Limited, Agricultural Development Bank, Nepal Industrial Development Corporation and Employees Provident Fund.
Chand, the owner of the firm, had filed a writ petition 21 months ago claiming that the Credit Information Bureau had no authority to blacklist his firm.
This is the first case decided by the Supreme Court in favour of the banks to recover their loans after the parliamentary attempt to impeach a few Supreme Court judges who had lifted the Mahalaxmi Sugar Mills from the blacklist.
The Public Accounts Committee (PAC) had recommended the House of Representatives to impeach the judges who had removed the Mahalaxmi Sugar Mills from the blacklist.The court had then said that the CIB had no legal authority to blacklist any firm.“The court has upheld the authority of the CIB,” Rastriya Banijya Bank’s legal advisor Puarnaman Shakya said.
-Ananta Raj Luitel

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