The court refused to grant the benefit of the Moratorium Policy to the petitioner on the grounds that they approached the court late and only when the NCLAT refused their application; and the contentions made by them were faulty. The plea was filed by a private company against a loan transaction which they believed to fall under Moratorium Policy. This ardent judgement was passed by Justice Nitin Jamdar and Justice Milind Jadhav in the matter of Wavell Investments Private Limited versus IL & FS Financial Services Ltd. (IFIN) and ors. [Writ petition (L) No.-2572 of 2020] by the Bombay High Court.
The petitioner took three loans from the respondent and requested to extend the benefit of the Moratorium Policy in respect of term Loan no.-1 & 2. Later the petitioner challenged the respondent’s reply which stated that ‘since the account in respect to loan transaction no. 3 of Rs. 100 crores were classified as a Non- Performing Asset by communication, the benefit of moratorium could not be extended’.
The court questioned credibility of the petitioner’s act stating that “the foundation of the petitioner’s case that the Petitioner agreed to be a part of the back-to-back transaction placing good faith and on the assurance of senior leadership of IL&FS group that the Back-to-Back transaction was bona-fide and permissible. The Petitioner Company learned of the malpractices through reports of Serious Fraud Investigation Officer. IL&FS duped the Petitioner into believing that transaction was bona fide and permissible. To grant relief to the Petitioner in the Writ Petition, we will have to accept this version of the Petitioner. The moot question is, can we do so.”
The court refused to accept the contentions laid down by the petitioner stating that “On the charge of the Respondents that there is a delay in challenging the classification of the account as Non-Performing Asset, the Petitioner contends that the Petitioner applied before NCLT and NCLAT and bonafide believed that, that aspect would be decided. In these circumstances, since the NCLAT refused to lift the embargo, the Petitioner has approached the Court. This cannot be a satisfactory explanation. If the Petitioner is of the opinion that the NCLAT would give the very same relief, then the application of the Petitioner is still pending. The petitioner could have approached the writ jurisdiction much earlier. It was only when IFIN refused to extend the benefit of the moratorium because of the account of the Petitioner as NPA, a challenge is raised in August 2020. There is a substance in the contention of the Respondent of delay and latches by the Petitioner. However, even otherwise, we have examined the petition on merits as follows”.
The court contended that “A prerogative writ is not granted as a matter of course. The Writ Court intervenes where justice, equity, and good conscience require its intervention. Considering the totality of the circumstances, the simplistic foundation of the Petitioner’s case cannot be accepted. We are not convinced of the bonafides of the petitioner, as asserted in the petition. That being so, we refuse to exercise our equity jurisdiction”.
Thus the court rejected the petition on the facts as stated: “The argument of the Respondents of maintainability is kept open to be urged in another case. It clarified that the observations on the role of the Petitioner are in the context of refusal to exercise the writ jurisdiction”.