Madras High Court allows ICICI Bank to recover Rs 222 crore dues from Subhiksha promoter

In a reprieve to ICICI Bank, the Madras high court on Wednesday ruled that it finds no ground to interfere in the order of Chennai Debts Recovery Appellate Tribunal that allowed the recovery of Rs 222-crore debt from erstwhile retail chain Subhiksha Trading Services and its guarantors including the promoter, R Subramanian.

Rejecting a civil revision petition by Subramanian that challenged the tribunal order, the high court comprising the chief justice Vijaya Kamlesh Tahilramani and justice M Duraiswamy observed that it was needless to say that the ICICI Bank is dealing with the public money and such a huge amount cannot be allowed to go unrecovered from the defaulting borrowers who have availed the loan as early as 2005.

Rejecting a civil revision petition by Subramanian that challenged the tribunal order, the high court comprising the chief justice Vijaya Kamlesh Tahilramani and justice M Duraiswamy observed that it was needless to say that the ICICI Bank is dealing with the public money and such a huge amount cannot be allowed to go unrecovered from the defaulting borrowers who have availed the loan as early as 2005.

The Enforcement Directorate had in 2018 arrested R Subramanian in a bank cheating case involving close to Rs 750 crore filed under the Prevention of Money Laundering Act. Earlier in 2015, the Economic Offences Wing of the Tamil Nadu police had arrested Subramanian for allegedly cheating depositors to the tune of Rs 150 crore.

The retail chain, which was launched in 1997 and had a faster growth, had shut shop in 2009. Subramanian’s company had availed of loans from at least 13 banks. In March 2016, the agency had attached assets worth Rs 4.5 crore of the accused in the Rs 77-crore Bank of Baroda fraud case.

The Central Bureau of Investigation (CBI) had also been on the hunt for him after a complaint was filed by banks for diverting the loan funds. The loan, taken from one of the public sector banks, was diverted for some other purpose other than what it was meant for.

The retail chain also got into trouble with investors, including Azim Premji’s private equity arm, Zash Investment. The lenders and investors had moved various courts. Subhiksha had suspended operations in 2008 after running out of cash and closed around 1,600 stores.

It also defaulted on staff salaries, vendor payments and bank loans.

In January 2009, Subhiksha approached banks, which had collectively lent it around Rs 750 crore, to restructure its debt, citing falling demand as a reason for its inability to follow the original repayment schedule. It became the first major retail chain to be referred to the corporate debt restructuring cell.