Punjab National Bank (PNB) has stopped Braj Binani, the promoter of Binani Industries, from flying to London by issuing a lookout notice under the new powers given to banks to prevent defaulters from fleeing the country.
The notice was issued by the bank chairman Sunil Mehta, and was flashed to all the airports. Binani was stopped at the Mumbai airport by immigration officials when he was about to board a chartered flight to London on January 23.
The lookout notice against Braj Binani was issued after he failed to turn up at the Kolkata Bench of the National Company Law Tribunal (NCLT) on January 20. Binani Industries had stood guarantor for a Rs 300 crore loan taken by its subsidiary Edayar Zinc (earlier Binani Cement), but failed to repay.
The lookout notice was handed over to the Bureau of Immigration in Delhi, which then flashed it at all airports.
"Binani was to fly to London in a chartered flight on January 24, but he advanced his travel to June 23 when he was intercepted by the immigration officials, who refused to allow him to fly out of the country. He later requested to fly to Jaipur which was allowed. The proactive step taken by the bank helped to intercept him on time," said an official who is monitoring the case.
The government in 2018 had empowered chief executive officers of public sector banks (PSBs) to issue lookout circulars (LOCs) against suspects before waiting for the enforcement agencies to file FIRs against them. This was necessitated after Nirav Modi fled the country after perpetuating over Rs 13,000 crore scam on PNB.
The bank had dragged Edayar Zinc to NCLT after it failed to repay loans of Rs 300 crore it owed to three public sector banks, led by PNB. Oriental Bank of Commerce and Punjab and Sind Bank are the other lenders in the consortium.
On January 22, a hearing was scheduled at the Kolkata Bench of the NCLT, but no one from the corporate debtor turned up. The next date of the hearing for the case is March 14. PNB, the financial creditor to Edayar Zinc, filed the insolvency petition against Binani Industries as the liability of the corporate guarantor is linked to the principal debtor under Section 128 of the Indian Contract Act.
PNB also had exposure to Binani Cement, which it sold to an asset reconstruction company (ARC). Binani Cement was taken to the NCLT by Edelweiss ARC. After a prolonged legal battle between UltraTech and Dalmia Bharat's Rajputana Properties, the company was finally sold to UltraTech which improved its price by outbidding Dalmia outside the Insolvency and Bankruptcy 2016 process.
Punjab National Bank and Oriental Bank of Commerce had declared their exposure to Edayar Zinc as NPA (non-performing asset) with effect from June 30, 2014, and in the case of Punjab & Sind Bank it was with effect from September 30,