Court Stays Order Against SBI's NPA Decision On PC Jeweller
SBI is to maintain the status quo regarding any action to be taken against the company as a consequence of the NPA decision.
The New Delhi District Court issued a stay order against State Bank of India after the bank classified PC Jeweller Ltd.'s loan account as a non-performing asset in 2021.
In its annual report dated May 30, 2023, the company said that its operations had picked up substantially during the first three quarters of FY23. The situation, however, changed after its resolution plan could not go through and the lead bank—SBI—decided to take the legal route to recover its exposure in January 2023.
PCJ filed a counterclaim for Rs 10,034 crore against SBI before the Debt Recovery Tribunal in New Delhi.
It had also approached the Delhi High Court against SBI, stating that there was a non-compliance of the Principle of Natural Justice. PCJ was not given any opportunity to explain their case after Jan. 2, 2023, and a unilateral decision was taken by SBI.
The district court has now found merit in PCJ's suit and ruled that, until further orders, SBI is to maintain the status quo regarding any action to be taken against the company as a consequence of the NPA decision.
SBI classified PCJ's loan account as an NPA on June 29, 2021.
Highlights Of PCJ's Q4 Results
Domestic sales in the quarter-ended March 2023 stood at Rs 173 crore vs Rs 169 crore in the same quarter a year ago.
The company's Ebitda was at a loss of Rs 128 crore vs Rs 158 crore in the fourth quarter of FY22.
PCJ suffered a loss before tax of Rs 258 crore vs Rs 279 crore in Q4 of FY22.
On Feb. 7, earlier this year, four banks—IDBI Bank, Indian Bank, Bank of India and Karur Vysya Bank—issued loan recall notices to PC Jewellers.
Soon after, State Bank of India initiated recovery proceedings against the company before the Debt Recovery Appellate Tribunal.