Debt Settlement Negotiations between SBI and PC Jeweller Extend; NCLT Postponed Hearing

9 Jan 2024 , 03:09 PM

On January 9, the National Company Law Tribunal (NCLT) was notified of some developments in the settlement negotiations concerning the debt repayment between State Bank of India (SBI) and PC Jeweller.

Senior attorney Nagesh, who represented SBI, also informed the court that the company’s top management is currently debating PC Jeweller’s settlement offer. Thus, the attorneys for PC Jewller and SBI jointly requested that the matter be postponed.

As a result, the NCLT postponed it until January 29 in order to give the results of the settlement negotiations more thought.

The parties jointly informed NCLT on December 12 that settlement negotiations were in progress and requested a hearing postponement. In addition to an upfront payment, the jewellery company has agreed to pay a sizable portion of its remaining debt over the course of three years. PC Jeweller owes SBI more than Rs. 3,000 crore.

It was reported in November 2023 that SBI had taken possession of two prestigious residences in New Delhi on the grounds of payment delinquency.

When SBI filed an insolvency petition against PC Jeweller Limited in June 2023, NCLT received notice of the case and requested a response from PC Jeweller. PC Jeweller submitted a 26 volume rebuttal to its 19 volume plea in response to SBI’s plea.

Due to the large number of filings and the complexity of the case, the plea was not heard on admission to insolvency up until this point. The PC Jeweller and SBI.

The problems for PC Jeweller started in February 2023 when banks decided to revoke loans that had been granted to the company after it was discovered in a filing that the business had fallen behind on loans totaling Rs 3,466 crore from banks and other financial institutions. A loan recall is a procedure in which the original lender asks the borrower or beneficiary to repay the advance.

The company disclosed that it had taken out loans from fourteen banks, including SBI, Indian Bank, Union Bank, and Punjab National Bank, in its annual report for the fiscal year 2021–2022. The company stated in its annual report that it owed the banks Rs 3,278 crore, which included the base sum plus interest.

The biggest lenders include Indian Bank with Rs 226 crore, Punjab National Bank with Rs 478 crore, Union Bank of India with Rs 530 crore, and SBI with Rs 1,060 crore in unpaid debt.

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