Supreme Court dismisses PIL seeking probe into JKM Infra
New Delhi : The Supreme Court has dismissed a public interest litigation seeking directions to investigate alleged ARC-facilitated banking fraud concerning JKM Infra Projects Limited, bringing relief to the company in the proceedings.
In its September 24 order in Prateeksha & Others versus Union of India & Others, the court said: “Keeping in view the nature of proceedings and the material placed on record, we are not inclined to entertain this PIL.”
Court declines to entertain petition
The contesting respondents had challenged the petition’s maintainability, alleging that it had been filed for oblique motives at the instance of respondent No. 18. The court had consequently directed the petitioners to disclose their particulars, bona fides and sources of information and documents.
After examining their joint affidavit, the court declined to entertain the PIL and dismissed it. It nevertheless clarified that its decision cast no aspersion on the petitioners’ bona fides.
SBI’s ‘no fraud’ decision supports JKM’s defence
The dismissal follows submissions by SBI and RBI contesting key aspects of the petition. SBI’s counter-affidavit states that its Fraud Identification Committee resolved to treat JKM’s account as a “no fraud” case after the Ernst & Young forensic audit was found to be inconclusive and subsequently reviewed by AKG & Associates.
Bank explains financial distress and recovery process
SBI stated the company’s account remained satisfactory until FY2015, after which delays in land allotment, statutory clearances and realisation of receivables affected operations.
The bank also defended its debt assignment to Prudent ARC for Rs 120 crore against book outstanding of Rs 427.43 crore. According to SBI, the transaction followed recovery efforts, a Swiss Challenge process and scrutiny through an External Screening Committee chaired by a retired High Court judge, followed by senior credit and board-level committees.
RBI records examination of complaint
RBI stated that its examination of the petitioners’ complaint found no regulatory violation warranting intervention. It explains that acquisition prices and compromise settlements fall within banks’ and ARCs’ commercial judgment, subject to applicable safeguards.
The September 24 order closes this PIL without directing the investigation sought by the petitioners. SBI’s reported committee decision and RBI’s regulatory response vindicate the stand of JKM.