Mumbai : The police complaint against former State Bank of India Chairman Pratip Choudhary, which led to his arrest, is not an isolated incident, but part of Hotel Goudavan Pvt Ltd’s repeated efforts to prevent insolvency resolution. Ltd., show court documents.
These include filing an FIR against the insolvency resolution professional, opposing the acquisition of assets, holding ‘illegal’ board meetings and alleging contempt for not paying attention to the insolvency process.
In many instances, the National Company Law Tribunal (NCLT) had to step in and push for legislation.
The arrest of Chowdhary, the chairman of SBI between 2011 and 2013, shook the banking community, and current and former bankers raised their voices against the action.
Choudhary was arrested by the Rajasthan State Police on November 1, after a Jaisalmer court issued an arrest warrant on a petition by the borrower. According to a Times of India report dated November 2, the complaint that led to his arrest claimed that Choudhary sold assets below market value to an asset reconstruction company, on whose board he later joined. However, Choudhary retired as SBI chairman in September 2013, six months before the soured loans were sold to ARC for recovery.
case is related to a ₹SBI gave a loan of 24 crores to Hotel Goudvan Pvt Ltd in limited installments, beginning January 2008. The loan was restructured in January 2009, and repayment was rescheduled.
In November 2012, SBI issued a notice to withdraw the loan, which by then had increased ₹33.93 crores. The bank approached the Debt Recovery Tribunal in 2013 and eventually sold the loan to Alchemist Asset Reconstruction Company (ARC) in March 2014, which referred it to the NCLT for resolution.
Court documents reviewed by Mint showed that even after the company was admitted to the NCLT and the board was dissolved, it held a meeting and decided to initiate arbitration proceedings.
The insolvency professional also informed the New Delhi Bench of the NCLT that the suspended directors have also appointed an arbitrator; However, the process was later declared “illegal and unlawful”.
The principal bench of NCLT at New Delhi in an order dated 5 September 2017 said, “The former management still continued the arbitration proceedings, resulting in the filing of contempt application.”
In August 2017, a former director of the company lodged an FIR against the insolvency professional at Jaipur’s Vaishali Nagar police station, alleging that he forged documents.
The resolution professional also faced opposition in taking possession of the property. “In order to comply with the order dated 31st March 2017 passed by the NCLT, Sankalp Professionals, along with their team, reached the premises of Fort Rajwada (Property), Jaisalmer on 3rd April 2017. Management and personnel of Hotel Fort Rajwada protested. Acquisition of property,” as per NCLT order dated 22 September 2017.
In December 2017, the NCLT approved a resolution plan by a non-bank financier to take over the company.
On Monday, SBI said in a statement that the borrower had initially lodged an FIR with the police against selling the property to Alchemist ARC. Aggrieved by the closure report filed by police officials, the borrower then filed a “protest petition” before the Chief Judicial Magistrate’s court, which led to Chowdhury’s arrest.
“Incidentally, SBI was not made a party to the matter. All the directors of that ARC, including Choudhary, who joined their board in October 2014, have been nominated in the said case.”
The bank reiterated that due process was followed when selling the loan to Alchemist ARC, and has already offered its cooperation to law enforcement and judicial authorities and will provide further information.
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