New Delhi: Amid a raging row over loan defaults by Vijay Mallya, the government on Sunday said "full force of the law" is being applied to bring all wilful loan defaulters to justice.
Minister of State for Finance Jayant Sinha said wilful defaulters and the corporates that are unable to repay loans as their business being hit due to global slowdown should not be commingled.
"We have some people that are wilful defaulters, that have genuinely engaged in illegal activity. As far as those are concerned, the full force of the law is being applied. All the investigative agencies are working in that regard to ensure that they have to be brought to justice," he told reporters.
He, however, did not made any direct reference to Mallya who had left India on March 2, presumably for London, days before the Supreme Court heard a plea of clutch of state-owned banks seeking recovery of over Rs 9,000 crore from his group companies.
Sinha said the second set of defaulters are those corporates who because of some slowdown in global economy or because of policy failure of the previous government are facing significant financial distress.
"And we have to have appropriate resolution process as well as appropriate policy intervention to ensure those that are NPAs for those kind of reasons go through orderly resolution process," he said.
He said there wasn't anything "illegal or criminal" done by those classic business failures that happened because of wrong business/financial strategies or external factors that made project or business unviable.
"... we have to recognise that we have to ensure these problems have occurred because people have done willfully wrong thing ...(and) people who are facing business challenges do not have to go through those kind of problems again.
"So we have to deal with structural issues which is where bankruptcy code becomes important so that we avoid these problems in future...," he said.
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