RE: LEGAL OPINION REGARDING STAY ORDER ON CLASSIFICATION OF LOAN LIABILITIES OF THE BORROWER, A/C. Company 1.
We refer to your letter dated 12.12.2006 on the above subject matter.
It appears that at the time of issuing Rule in Writ Petition No. 5464 of 2006 the Hon’ble High Court Division vide its order dated 19.06.2006 has stayed the classification of liabilities of the Company 1 Group including Company 1 for three month from the date which was subsequently extended for period of four month vide order dated 24.08.2006. The Court also directed the BANK 1 not to show the aforesaid Companies as classified in the CIB database.
Since the Hon’ble Court stayed the classification of the liabilities of the captioned account Bank 1 can not show or report to Bank 2 showing the captioned account as classified account unless the said order of stay is vacated by the Court.
It may be mentioned here that the Civil Petition for Leave to Appeal No. 1024 of 2006 filed by Bank 3 challenging the said order of stay is now in the list of the Hon’ble Appellate Division of the Supreme Court for hearing and we shall communicate you the outcome of the hearing.
If you have any query, please do not hesitate to contact us.
For: “The Lawyers & Jurists”