The Hyderabad High Court on Wednesday passed an order upholding the right of Andhra Bank to auction assets of private company Transstroy.
A division bench comprising Justice V. Ramasubramanian and Justice P. Keshava Rao also declared that the other lender banks also had the right to initiate legal action against the company as the latter defaulted in paying back loans. As per the pleas filed by different banks before the Debt Recovery Tribunal, the company, owned by Telugu Desam party Member of Parliament Rayapati Sambasiva Rao, had dues to the tune of ₹3,000 crore.
The bench pronounced the verdict after hearing a petition filed by M/s Transstroy India Limited which said Andhra Bank’s action was in violation of directives issued by the Reserve Bank of India.
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The bench said the RBI’s letter dated August 28, 2017, did not speak about any authorisation given by the Central government to initiate only “insolvency resolution process” in the event of a default, under the Insolvency and Bankruptcy Code.