Court notice to DCHL for defaulting on Karur Vysya Bank loan

HYDERABAD: A criminal court in Nampally has issued summons to Deccan Chronicle Holdings Ltd (DCHL), its chairman T Venkatram Reddy, vice chairmen VinayakRavi Reddy, P K Iyer and six other directors to appear before it on July 29 to explain as to why they defaulted on Rs 50 crore loan to KarurVysya Bank (KVB) and why the cheques issued by them bounced.
KVB, which lent Rs 75 crore to DCHL for buying printing machinery in Bangalore and also towards a short-term loan, is now feeling aggrieved over the default of a major portion of its loan. When the cheques issued by DCHL bounced, the bank moved a petition before the criminal court under section 138 of the Negotiable Instruments Act.
The bank also moved the Debts Recovery Tribunal (DRT) at Hyderabad seeking recovery of Rs 52.68 crore and sought an injunction to restrain DCHL from transferring the ownership of the printing machinery at Bangalore on the grounds that the property was under the exclusive hypothecation to the bank. It sought the auctioning of the machinery for recovering its dues.
Responding to the plea of the bank, the DRT imposed a status quo on the machinery and issued notices to the DCHL management. According to P Rajesh Babu, the counsel for Karur Vysya Bank, the DRT after noting that the DCHL management chose not to respond despite notices reaching it, ordered issuance of a fresh notice in the form of a newspaper advertisement in a vernacular daily by July 23.