HC junks plea challenging RBI move to supersede boards of 2 SREI group firms

A bench of Justices Ujjal Bhuyan and Madhav Jamdar dismissed the plea, saying it will give detailed reasons later. On Monday, the Reserve Bank of India (RBI) had superseded the boards of two companies of the SREI group and appointed an administrator to run their affairs.

Mumbai:The Bombay High Court on Thursday dismissed a writ petition filed by two promoters of infrastructure finance firm SREI group challenging the RBI's decision to supersede the boards of two of its non-banking financial companies and initiate insolvency proceedings against them.

A bench of Justices Ujjal Bhuyan and Madhav Jamdar dismissed the plea, saying it will give detailed reasons later.

"We have heard the counsels. For reasons to be dictated separately we are not inclined to entertain the writ petition. Writ petition is dismissed," the HC said.

On Monday, the Reserve Bank of India (RBI) had superseded the boards of two companies of the SREI group and appointed an administrator to run their affairs.

As per the HC order, two promoters, Adisri Commercial and Hemant Kanoria, had filed the writ petition challenging RBI's action.

They said in the plea that RBI had acted in haste and in an arbitrary manner.

The petition had also sought a stay on initiating insolvency proceedings against Srei Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL).

The RBI had superseded the boards of SIFL and SEFL, citing concerns over governance and payment defaults, and decided to refer the two NBFCs for resolution under the insolvency law.

The two entities owe over Rs 30,000 crore to banks and financial institutions.

PTI