Why don’t you make defaulters’ list public, SC asks Centre

NEW DELHI: The Supreme Court on Monday sought the central government’s response by October 28 to a plea for making public the list of business houses that had defaulted on repayment of bank loans exceeding Rs 500 crore each.

R Sedhuraman

Legal Correspondent

New Delhi, October 24

The Supreme Court on Monday sought the central government’s response by October 28 to a plea for making public the list of business houses that had defaulted on repayment of bank loans exceeding Rs 500 crore each.

A Bench headed by Chief Justice TS Thakur set the deadline after going through the list submitted by the Reserve Bank of India (RBI) in a sealed cover. The RBI pleaded against such disclosure, contending that it would be against the confidentiality clause and that it would also adversely affect economic growth.

The Bench asked Solicitor General Ranjit Kumar to take instructions from the Centre and posted the next hearing for October 28. Appearing for the PIL petitioner, senior counsel Prashant Bhushan pleaded for disclosure of the names of defaulters, arguing that the RBI was covered under the Right to Information (RTI) Act.

The Solicitor General said the government had already set up a 5-member high power committee that was expected to submit its report on the issue shortly.

The Bench felt that the list should be made public without specifying if the non-repayments were willful or due to financial constraints.

“Rich people take crores of rupees as loans and declare insolvency, while poor farmers are suffering,” the Bench had remarked at the last hearing. “The list shows that the outstanding loans are indeed very large.”

RBI pleaded that making the list public was against banking laws under which financial institutions could not disclose the assets and liabilities of their clients.

Initially, the Bench was hearing the PIL on an alleged scam in the Housing and Urban Development Corporation (HUDCO) that resulted in a loss of thousands of crores. It then asked the RBI to provide a list of major defaulters.

Subsequently, the apex court enlarged the scope of the PIL beyond HUDCO to go into the problem of mounting bad loans, known as non-performing assets (NPAs).