High Court rejects plea from Trident group on fraud accounts

Hyderabad: The Telangana High Court has rejected a plea from Golden Jubilee Hotels (Trident) to set aside the decision of the lender’s bank to classify its bank accounts as "fraud accounts".

A division bench headed by Chief Justice SC Sharma observed that the petitioner’s bank accounts were rightly declared as fraudulent, as this was done on the basis of the forensic audit report.  "There is no illegality or infirmity in the decision-making process warranting court interference in the peculiar facts and circumstances of the case. The action has been taken against Golden Jubilee Hotels under due process of law," the bench said.

The petition was filed by  Yashdeep Sharma, a promoter and director of  Golden Jubilee Hotels. His contention was that the forensic audit report did not speak of any adverse effects vis-à-vis their  transactions and book accounts and yet the bank unilaterally classified the accounts as "fraud" accounts  without giving any opportunity for the hotel group to submit its contentions.

The firm had taken  hundreds of crores of rupees as credit from a consortium of banks  led by Bank of Baroda, Punjab National Bank, Jammu Kashmir Bank, Canara Bank, Union Bank of India etc. Around Rs 552 crore was  due on this count as on  March 31, 2018. Around Rs 397 crore was mentioned as of "sundry debtors" in the total debts, it was noted in the  forensic report.

After going through the forensic report, the bench said that the accounts of  the firm were  rightly declared as "fraud accounts," and in doing so, the bank followed the guidelines of the RBI master circular.