Delhi HC intervenes for release of 73.59% Jindal India shares pledged with banks
NEW DELHI : The Delhi High Court on Tuesday intervened for release of 73.59% of Jindal India Thermal Power Ltd’s shares pledged with a consortium of lenders led by Punjab National Bank. The power company had moved a writ petition in the high court saying that although it had fully paid the resolution amount of ₹2,450 crore before the scheduled date of payment the lenders had refused to release the pledge on the shares.
The high court has directed the lenders to hold a joint meeting at the earliest to work out the modalities for transferring 10% of Jindal's equity among themselves and releasing 64% of the pledged shares to the company. Afterward, the banks have been instructed to upgrade the status of Jindal India's account to standard from non-performing asset and to update the same in the Central Repository of Information on Large Credits.
The court suggested that JITPL should have pursued its grievances through a civil suit in a civil court, considering the dispute a breach of contract under the master resolution agreement, or MRA, which warrants remedies such as specific performance or damages, rather than a writ petition. The origins of the dispute lie in JITPL's utilization of various financing facilities from a consortium of banks, with PNB as the leading institution.
These facilities, including term loan facilities, working capital loan, and fund-based and non-fund-based facilities, were governed by multiple agreements and facility agreements. However, in 2016, JITPL's account was declared as a non-performing asset, or a bad loan.
Subsequently, JITPL approached the banks for the resolution of its debts, leading to the negotiation and eventual agreement on the MRA dated 29 May, 2021. The MRA allowed JITPL to
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