Srei founder Hemant Kanoria on Thursday moved a contempt application before the Kolkata bench of the National Company Law Tribunal (NCLT) against Punjab and Sind Bank over alleged violation of an interim order of the tribunal by declaring accounts of Srei Equipment Finance (SEFL) and Srei Infrastructure Finance (SIFL) as ‘fraud’ and intimating it to the stock exchanges.

Punjab and Sind Bank said in a stock exchange filing on April 19 that it has declared the accounts of SEFL and SIFL with cumulative outstanding dues of Rs 1,234.34 crore as fraud and has reported the same to the Reserve Bank of India (RBI).

In their submission before the bench, counsels for Kanoria, Ratnanko Banerji and Rishav Banerjee, said Punjab and Sind Bank made wilful and deliberate violation of the interim order, passed by the NCLT on February 7. The NCLT, Kolkata bench, in its order dated February 7 directed banks not to disseminate the report of the two NBFC accounts by KPMG, they said.

Lenders to SIFL and SEFL had appointed KPMG in April 2021 for a forensic audit, when a loan recast was being considered.

Punjab and Sind Bank is a part of the committee of creditors (CoC) and is aware of the February 7 order passed by the NCLT, the counsels said.

Senior advocate Abhinav Vashisht, representing lenders before the tribunal, said, “The act of the Punjab and Sind Bank is not a contempt, I would say. The order said lenders cannot disseminate the KPMG report. but that does not stop them to take any action further.”

The tribunal reserved its order on the matter.

Earlier, the Delhi high court has restrained Punjab and Sind Bank from declaring the bank accounts of Srei firms as fraud after Kanoria had sought legal reprieve. In an order dated April 22, the high court said that till the next date, Punjab and Sind Bank will stand restrained from taking any further steps or action prejudicial to the petitioner on the basis of the order declaring the petitioner’s bank account as fraud. The matter has been listed for hearing on August 23.

Kanoria, the erstwhile director of SEFL and SIFL, had earlier moved the NCLT with an appeal to set aside the audit conducted by KPMG in light of the initiation of the insolvency process and restrain the lenders from publishing any audit report to the Central Repository of Information on Large Credits.

Kanoria has also written to RBI governor Shaktikanta Das, requesting him to advise lenders not to act against the two Srei firms based on “inconclusive” findings in the KPMG forensic report.

Insolvency proceedings against the two NBFCs commenced in October last year after the insolvency petitions filed by the RBI were approved by the Kolkata bench of the NCLT. Sharma, former chief general manager of Bank of Baroda, took charge of the two Srei companies after the central bank came down heavily on both over governance issues and superseded the boards of directors in October last year.

The Kolkata bench of the NCLT on October 8 gave its approval to start insolvency proceedings against the two companies. The central bank had filed the insolvency petitions just after the Bombay High Court dismissed a writ petition filed by two promoters of Srei group challenging the RBI’s decision to supersede the boards of these companies and initiate insolvency proceedings against them.