Is SREI Equipment Finance Ltd Bound By RBI Circulars? Supreme Court To Consider

The Supreme Court docket is about to contemplate the problem whether or not SREI Gear Finance Restricted is certain by the circulars issued by the Reserve Financial institution of India, being an organization backed by the Authorities of India.

The Court docket additionally ordered an interim keep on the proposed debt project course of initiated by SREI Gear Finance Restricted underneath the Swiss Problem Technique for the project of debt regarding United Asian Merchants Restricted till the subsequent listening to, scheduled for August 5, 2025.

The order handed by a partial courtroom working days bench comprising Justices Ujjal Bhuyan and Okay. Vinod Chandran got here amidst allegations of regulatory non-compliance and questions over the locus standi of the petitioner, Worldwide Monetary Service Restricted (IFSL). Additional, the Court docket directed SREI to chorus from finalizing the Expression of Curiosity (EoI).

The case originated from a judgment delivered by the Calcutta Excessive Court docket on June 9, 2025, which overturned an interim injunction granted by the trial courtroom towards SREI’s EoI. The Excessive Court docket discovered that IFSL lacked the required locus standi to problem the method, because it had neither submitted a bid nor established eligibility to take part within the Swiss Problem bidding.

The Excessive Court docket additional upheld the Swiss Problem Technique as a respectable debt decision mechanism, validated underneath the Reserve Financial institution of India’s 2021 Grasp Round and supported by the Supreme Court docket’s judgment of Ravi Improvement v. Shree Krishna Prathisthan, (2009) 7 SCC 462. However, acknowledging the arguability of sure authorized factors, the Excessive Court docket granted a 15-day keep on the operation of its order, permitting IFSL to hunt reduction from the Supreme Court docket. Following this, IFSL moved to the Supreme Court docket.

In the course of the proceedings, the Court docket heard arguments on each the character of SREI’s possession and its obligations underneath the RBI regulatory framework.

Senior Advocate Vikram Nankani, showing for IFSL, submitted that SREI, having been taken over by the Nationwide Asset Reconstruction Firm Restricted (NARCL), a government-backed entity, qualifies as a “authorities firm” and is due to this fact certain by enhanced transparency necessities underneath RBI tips. It was additional argued that SREI’s debt project course of didn’t adjust to RBI-mandated safeguards, together with cheap due diligence timelines, appointment of two exterior valuers for money owed above ₹100 crore, and clear disclosure of standards used to pick the anchor bidder.

Then again, Senior Advocate Rajan Bachawat, showing for SREI, strongly opposed the maintainability of the petition. He contended that IFSL, being neither a borrower nor a collaborating bidder, has no authorized proper to intervene within the course of, a discovering already endorsed by the Excessive Court docket. He additionally asserted that there isn’t a advantage in any respect within the petition because the Petitioner is neither a borrower nor a bidder. Subsequently, the petitioner lacks locus standi to institute the go well with.

Contemplating the significance of the matter, the Court docket agreed to look at a set of essential points on the subsequent listening to in August, and issued discover to the Respondents returnable on Aug. 5, 2024, and ordered that “respondent(s) shall not finalise the invitation for expression of curiosity for project of debt underneath the Swiss Problem Technique dated 16.04.2025.”

Case Title: INTERNATIONAL FINANCIAL SERVICE LIMITED VERSUS SREI EQUIPMENT FINANCE LIMITED & ANR.

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Look:

For Petitioner(s) :Mr. Vikram Nankani, Sr. Adv. Ms. Rooh-e-hina Dua, AOR Mr. Tanay Agarwal, Adv.

For Respondent(s) :Mr. Rajan Bachawat, Sr. Adv. Mr. Saurav Agarwal, Adv. Mr. Paritosh Sinha, Adv. Mr. Shounak Mukhopaddhay, Adv. Mr. Saubhik Chowdhury, Adv. Ms. Priyata Chakraborty, Adv. Ms. Tapasika Bose, Adv. Mr. Tavish Bhushan Prasad, AOR Mr. Mehak Joshi, Adv.