In a scathing critique of banking practices, the Supreme Court on Thursday grilled authorities over the suspiciously low valuation of Delhi’s Hyatt Regency hotel amid its insolvency proceedings. The PIL by Infrastructure Watchdog exposed how elite defaulters seemingly receive kid-glove treatment compared to ordinary citizens.
During the hearing before a bench presided over by CJI Suryakant, the court highlighted the stark hypocrisy. ‘A destitute woman’s house is valued at just 40 lakhs by banks, blocking her sale,’ noted the CJI. ‘Yet, for opulent properties like five-star hotels, valuations magically inflate or procedures bend. This double standard is unacceptable.’
Prashant Bhushan pointed to procedural lapses under the IBC, alleging intentional undervaluation to absolve massive loans taken by Asian Hotels Group. The bench ordered the Centre to furnish complete records on the hotel’s loan default and subsequent auction setup. Notices went out to key banks—Bank of Maharashtra and Punjab National Bank—along with the hotel group, mandating affidavits within weeks.
The judiciary’s intervention comes at a time when public trust in financial institutions is waning due to repeated NPA scandals. The court stressed equitable application of laws: debtors willing to settle should not be railroaded into fire-sale auctions without fair assessment. This matter transcends one hotel; it probes systemic flaws where public money bears the brunt of corporate indiscretions.
Stakeholders now face intense scrutiny. The upcoming rejoinders could unravel deeper networks of influence in loan waivers. For now, the Supreme Court’s firm stance reaffirms its role as guardian against fiscal impropriety, potentially reshaping IBC enforcement for greater fairness.
