- (1.) THIS writ petition pertains to the issue of binding guidelines to check growing of non - performing assets of the nationalised banks and public financial institutions. Pursuant to the order dated 9-8-2005, Mr Prashant Bhushan, learned counsel for the petitioner, has sent his suggestions, as contained in the letter dated 25-8-2005, addressed to Mr K.P. Pathak, learned Additional Solicitor General of India. According to the learned counsel, the suggestions, if implemented, will go a long way in checking the problem of non - performing of assets. The suggestions are: "1. In the definition of 'wilful defaulters' as contained in the RBI guidelines dated 30-5-2002 a further clause 3(d) may be added after clause 3(c) in the following terms: '3(d) The unit has defaulted in meeting its payment / repayment obligations to the lender and has also disposed or removed the securities given by him or it for the purpose of securing the loan amount without the knowledge of the bank / lender.'
(2.) THAT as per the last affidavit of the Union of India the banks have been asked to constitute a committee of higher functionaries headed by the Executive Director and two GMs / DGMs to determine whether the default is wilful or not. It is suggested that it will be desirable that another committee consisting of high - ranking RBI officials may be constituted so that in the cases involving the unpaid amount of ?one crore or more and where the committee of the bank concerned have come to the conclusion that it is not a case of wilful default, the case can be re - examined by such committee of RBI. It is necessary to constitute such committee of RBI officials for re - examining the cases of large default of ?one crore or more as sometimes top officials of banks are also involved in cases of big lending. It will be desirable that the promoter or promoters of a borrowing company should be required to give an affidavit stating that whether it or they have been promoters of other company or companies at present or in past who have been guilty of default whether wilful or not and if so details thereof. This information will be a useful input for the banks to determine whether the company of such promoter is creditworthy or not.
(3.) IT will be desirable that in every case of borrowing by the public limited company a conditional personal guarantee of the promoter or promoters of such company is obtained, which can be invoked in the case it is found that the company has wilfully defaulted in repayment of the loan advanced to it. No promoter can be heard to say that his assets should be touched even if the company promoted by him has wilfully defaulted.;