HYDERABAD: The Telangana High Court on Wednesday refused to stay the order passed by a commercial court which barred Karur Vysya Bank from filing a complaint against Megha Engineering and Infrastructure Ltd.(MEIL) before the Reserve Bank of India.
The High Court asked the counsel for the bank as to how the bank was proceeding against MEIL without having entered into any loan agreement or even a contractual relationship. However, the High Court directed the commercial court to dispose of the matter expeditiously. When the case came up for hearing, a bench comprising Chief Justice Satish Chandra Sharma and Justice Abhinand Kumar Shavili questioned whether the appeal by Karur Vysya Bank was even maintainable.
The counsel appearing for MEIL contended that MEIL was not a borrower and therefore Karur Vysya Bank could not have filed a complaint against it before RBI. He contended that MEIL was a victim of the fraudulent actions of the real borrower (SREI Equipment Finance Ltd.) and the mischievous conduct of the private sector bank. Senior counsel who appeared for Karur Vysya Bank argued that the appeal was maintainable as the bank had stepped into the shoes of the borrower.