In Brief
SIDBI issued Bonds to CRB Capital, which were later sold to SIBCO. When SIBCO sought to claim interest on delayed payment of principal and accrued interest, SIDBI refused, citing an RBI directive restricting payment due to CRB Capital's liquidation proceedings. The Supreme Court held that RBI directives are statutorily binding on banks. The transfer to SIBCO fell within a 'suspect spell' for fraudulent preference, creating a cloud over SIBCO's title until the Company Court cleared it in 2004. SIDBI promptly paid upon that judgment. SIBCO accepted payment without protest and only seven months later demanded interest on delayed payment, barring the claim by waiver and constructive res judicata. Interest on delayed payment was not awarded as SIDBI acted bona fide under RBI directives.
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