In Brief
Jayaswal Neco Industries challenged three RBI circulars by Special Leave Petition. After the Court granted status-quo, the company and eleven lenders (including nine public sector banks/institutions) assigned debts to a reconstruction company (ACRE), which then agreed to withdraw insolvency proceedings if the company withdrew its petition. The RBI opposed this withdrawal, arguing the settlement was reached behind its back. The Supreme Court allowed the withdrawal, chiefly because nine of the eleven debt-assigning lenders were public institutions; rejecting the petition could have forced refunds to them. The company was required to deposit Rs. 10 lakhs as costs."
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