Telangana HC gives CBI, ED free hand to probe firms

HYDERABAD: The Telangana High Court on Wednesday modified its earlier interim orders, paving the way for the CBI and ED to proceed with its investigation in the cases registered against various companies that have defaulted on loan payments. 

The earlier orders had prohibited authorities from taking any coercive step against the erstwhile directors of companies, who had challenged the action of various public and private sector banks in declaring their accounts as fraud in accordance with a circular issued by the RBI.  

A division bench of the High Court, comprising Chief Justice Hima Kohli and Justice B Vijaysen Reddy, passed this order in a batch of petitions filed by Coastal Projects Limited, Transstroy India Limited, and Ind Bharath Thermal Power Company Limited, which belongs to Narsapuram YSRC MP K Raghu Rama Krishna Raju.

Transstroy India took loans to a tune of Rs 9,394 crore from various banks, while India Bharath borrowed Rs 826 crore and failed to repay them. The Coastal Project took Rs 4,736 crore loans and defaulted on repayment.

The CBI and ED have registered cases against these companies and are investigating. When the counsels for the probe agencies submitted that the investigations had come to a grinding halt due to interim orders of the court, the bench modified these. It issued notices to the respondents, including the RBI, the banks and some individuals, for filing counter affidavits, and posted the matter to July 16.