HC REJECTS GVR INFRA CHIEF’S PLEA ON TRAVEL ABROAD

The Telangana High Court on Friday rejected the plea of Garikapati Venkateshwara Rao, Director-cum-Chairman of GVR Infra Projects Ltd, against a lockout circular (LOC) issued in his name. He had been stopped on his way to the Maldives.

Justice G. Radha Rani, while dismissing his plea, pointed out that he had given personal guarantee to a loan of `226 crore taken by his company. In order to recover the public money, the LOC could not be revoked.

GVR Infra had borrowed

`250 crore from the erstwhile Vijaya Bank (now merged with Bank of Baroda).

As the amount was not repaid, proceedings were initiated against the company under the Insolvency and Bankruptcy Code, 2016. The matter then went to the National Company Law Tribunal.

Rao told the court that the loan was covered under the resolution plan under which GVR Infra had been taken over and he was not connected with the company.

B. Jithender, counsel for the immigration department, told the court that the loan was secured by giving a personal guarantee. After adjusting the dues, the outstanding amount was

`226.02 crore. As per the settled legal position, the liability of the borrower and guarantor were co-extensive, counsel said.

Jithender argued that having evaded repayment and while attempting to flee the country, G.V. Rao could not claim that his rights were violated. The action by the bank to safeguard its economic interest does not amount to violation of petitioner's fundamental rights, counsel submitted.

After perusing the details, Justice Radha Rani observed, “if the lookout circular is lifted and if the Chairman of GVR Infra disappears, the recovery proceedings would be brought to standstill and recovery of crores of public money would become impossible. Hence, it is considered fit to dismiss the petition.”

B. JITHENDER, counsel for the immigration department, told the court that the loan was secured by giving a personal guarantee. After adjusting the dues, the outstanding amount was `226.02 crore. As per the settled legal position, the liability of the borrower and guarantor were co-extensive, counsel said.

HE ARGUED that having evaded repayment and while attempting to flee the country, G.V. Rao could not claim that his rights were violated. The action by the bank does not amount to violation of petitioner's fundamental rights.