Supreme Court seeks data on the Corporate Entities with Debts in excess of Rs. 500 Crores

Taking note of rising bad loans, the Supreme Court on Tuesday in Centre for Public Interest Litigation v Housing & Urban Development Corporation Ltd [MANU/SC/0014/2017] asked the Centre to give the list of corporate entities against whom outstanding loans were in excess of Rs 500 crore, besides the empirical data on recovery cases pending for last ten years in debt recovery tribunals (DRTs) and their appellate bodies. A bench comprising Chief Justice T S Thakur and Justices A M Khanwilkar and D Y Chandrachud rued the lack of infrastructure and manpower at DRTs and debt recovery appellate tribunals (DRATs), which decide recovery cases and said the legislative changes on fast disposal of such matters will not yield results unless infrastructure is not "commensurate" with the burden of work.

The Bench has also asked the Centre to file an affidavit dealing with various issues and sought "empirical data on the pendency of cases for more than ten years and the list of corporate entities where the amount outstanding is in excess of Rs 500 crore". The court asked "whether the timelines set down in the amended legislation are capable of being achieved with the existing infrastructure including judicial personnel and staffing pattern of the debt recovery tribunals and debt recovery appellate tribunals".

Union Government has been asked by the Apex Court to file an affidavit specifically dealing with the following issues within a period of four weeks from the date of Judgement:

(i) Whether the timelines set down in the amended legislation are capable of being achieved with the existing infrastructure including judicial personnel and staffing pattern of the Debt Recovery Tribunals and Debt Recovery Appellate Tribunals;

(ii) The underlying basis, if any, upon which the revised timelines have been stipulated and whether any scientific study has been conducted on the availability of infrastructure;

(iii) Whether, and if so, what steps the Union government intends to adopt to enhance the infrastructure of Debt Recovery Tribunals and the Appellate Tribunals in terms of physical infrastructure, judicial manpower and non-judicial personnel required for the efficacious functioning of the Tribunals;

(iv) The specific plan of action including time-schedules within which the existing infrastructure would be upgraded so as to achieve the time frame for disposal indicated in the amended legislation; and

(v) Empirical data on the pendency of cases for more than ten years and the list of corporate entities where the amount outstanding is in excess of Rs. 500 crore.

The Bank Employees Associations had issued a statement last year that in all, there are 7,129 accounts with amount to the tune of Rs 70,540 crore in wilful defaulter accounts. These loans constitute about 18 percent of the overall bad loans (Rs 400,000 crore) of Indian banks and about 1 percent of the total loans (Rs 65 lakh crore approximately) given by the banking sector. They had also released a list of top defaulters also to the press