In Brief
Small Industries Development Bank of India (SIDBI) withheld payment and interest on certain bonds transferred to SIBCO, citing an RBI directive issued during liquidation proceedings against the bonds' original holder. SIBCO sued for interest on delayed payment. The Supreme Court held that the RBI directive was statutorily binding on SIDBI despite not citing enabling provisions. SIDBI reasonably withheld payment due to liquidation concerns and potential fraudulent preference under the Companies Act. SIBCO, having acquired bonds during a suspect period and accepted payment without protest, failed to establish a claim to delayed-payment interest. The Court found SIBCO barred by waiver, acquiescence, and constructive res judicata. SIDBI's appeal was allowed, restoring the trial court's dismissal.",
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