The legal counsel for Coimbatore-based Rajshree Sugars and Chemicals (RSCL) said the company would appeal against the Madras High Court order, which held that the company’s derivatives contract with Axis Bank is valid.
The company added that it would also challenge the court’s order, asking the bank to seek relief from the Debt Recovery Tribunal (DRT).
Since March this year, Rajshree Sugars and Axis Bank have been fighting a legal battle over foreign exchange derivatives contracts sold by the bank to the company, which resulted in losses for the company. The company had refused to pay to the bank, citing the contract as a wagering deal and, therefore, not tenable.
The Madras High Court yesterday had ruled, saying the derivatives contract is valid, but the bank has to approach DRT to get an order, asking Rajshree Sugars to pay around Rs 46-50 crore to the bank.
Rajshree Sugars’ case against Axis Bank is not an isolated one. Several companies across the country have dragged a handful of private banks, which sold foreign exchange derivatives contracts, to courts.