# In the matter of Adisri Commercial Private Limited and another Vs. Reserve Bank of India and others

> HC judgment dated 2021-10-07. Citation: TCN-2021-HC-00014. The writ petition was filed by Adisri Commercial Private Limited and another against the Reserve…

- **Court:** HC
- **Order date:** 7 Oct 2021
- **Citation:** TCN-2021-HC-00014
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/adisri-commercial-private-limited-and-another-vs-reserve-bank-of-india-and-other-54296328

## Summary

### Background

The writ petition was filed by Adisri Commercial Private Limited and another against the Reserve Bank of India and others, seeking to quash an order dated 01.10.2021 and a related press release dated 04.10.2021. The impugned order, passed under section 45IE of the Reserve Bank of India Act, 1934, superseded the Board of Directors of respondent No.2 and appointed an administrator. The Reserve Bank of India also stated its intention to initiate corporate insolvency resolution of respondent Nos.2 and 3 under the Insolvency and Bankruptcy Code, 2016.

## Facts

Adisri Commercial Private Limited and another filed a writ petition against the Reserve Bank of India (RBI) and others challenging the RBI's order dated October 1, 2021, which superseded the Board of Directors of Srei Infrastructure Finance Limited (SIFL), the respondent No. 2, under Section 45IE of the Reserve Bank of India Act, 1934. The RBI also appointed an administrator, Shri. Rajneesh Sharma. The RBI's decision stemmed from a statutory inspection of SIFL, revealing serious financial deterioration and defaults in payment obligations. SIFL had total borrowings of Rs. 11,746 crore as of June 30, 2021, and had defaulted with 12 lenders aggregating Rs. 3,566 crore. SIFL and Srei Equipment Finance Limited (SEFL) had approved a slump exchange of assets and liabilities

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## Issues and analysis

### Issue 1: Whether the High Court should invoke its extraordinary jurisdiction under Article 226 of the …

**Ratio:** The High Court should be circumspect in interfering with matters of financial, economic,

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**Reasoning:** The court reasoned that the Reserve Bank of India is empowered and competent to handle

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**Interpretation:** Article 226 of the Constitution of India grants the High Court the power to

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**Application:** The court applied the ratio to the facts of the case, finding that the Reserve

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## Parties

- **Judges:** UJJAL B…; Madhav J.…
- **Appellants:** Adisri Commercial…
- **Respondents:** SREI Infrastructur…; Reserve Bank of…
- **Advocates:** Janak Dwa…; Ameet…; +10 more

## Timeline

- **2019-07-04 — Approval of Transfer of…**: The Board of Directors of SIFL and SEFL approved the transfer of assets and liabilities…
- **2019-10-01 — Effective Date of Slump…**: SIFL and SEFL gave effect to the slump exchange, despite non-receipt of NOC from the…

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