Delhi High Court Rejects PIL for Probe into Hyatt Regency Owner's One-time Loan Settlement with Banks

Prashant Jha (Bar and Bench) 03 November 2025

Economy & Nation

The Delhi High Court on Monday dismissed a public interest litigation (PIL) petition seeking an investigation into the One Time Settlement (OTS) deals concerning loans extended by Punjab National Bank (PNB) and Bank of Maharashtra (BOM) to Asian Hotels North Private Limited, which owns the Hyatt Regency in Delhi [Infrastructure Watchdog v Union of India and Ors].

A Division Bench of Justices C Hari Shankar and Ajay Digpaul said that the PIL filed by New Delhi-based NGO Infrastructure Watchdog was a shot in the dark, based on surmises, conjectures and assumptions and no case was made out to even issue notice in the matter.

“What the petitioner is seeking from this Court is, however, clearly a roving inquiry, on the basis of skeletal facts, without being aware of the complete nature of the transactions which form subject matter of the petition,” the Court observed.

It underscored that the public sector banks had exercised requisite degree of financial prudence before entering into OTS and that if such PILs are entertained, it “could throw the entire banking system into jeopardy, and disincentivise banks and financial institutions from entering into bona fide commercial transactions”.

It said that submissions made by the PNB and BOM showed that there was no “contumacious or culpable financial impropriety in the decision of the PNB and the BOM to enter into the OTSs” with Asian Hotels Private Limited.

“Besides, the fact that, even otherwise, a writ court cannot set aside a private contract executed between the parties, as is prayed in the present petition, we are also of the view that no case for granting the prayer for institution of an investigation into these matters by the CBI, CVC or any other agency is made out with the AHN,” the Court added.

Infrastructure Watchdog moved the Court alleging undervaluation and financial impropriety in the Asian Hotels North’s OTS settlement with the public sector banks.

The petitioner alleged that the hotel was undervalued in OTS negotiations, causing loss to the public exchequer. It was stated that complaints had been sent to enforcement and vigilance authorities but received no substantive response.

After considering the case, the Court also said that Rule 9(i)(c) of PIL Rules requires a specific averment in the writ petition as to the source of knowledge of the fact alleged.

However, a mere reference to the source as “a reliable whistleblower” cannot satisfy the requirement of Rule 9(i)(c), the Court said.

“The disclosure, under Rule 9(i)(c) of the PIL Rules, has to be a meaningful disclosure. In an extreme case, where, for example, disclosure might endanger the life or limb of the petitioner, the Court may permit the disclosure to be made in a sealed cover, or confidentially to the Court. There can, however, be no secrecy from the Court, and the reference to the source of the petitioner’s information as a “reliable whistleblower” cannot, to our mind, be said to conform to the mandate of Rule 9(i)(c) of the PIL Rules,” the Court said.

Ultimately, it dismissed the plea.

Courtesy: Bar & Bench

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