NCLT seeks transfer of insolvency proceedings against Era Infra to larger bench
Mumbai: The National Company Law Tribunal (NCLT) has referred insolvency proceedings against Era Infra Engineering Ltd to the president of the tribunal for transferring it to a larger bench or to take any other decision deemed fit, according to the order on the tribunal’s website.
The order was passed on Monday. The special bench had earlier heard the jurisdictional issue on the insolvency petition filed by Union Bank of India against Era Infra, which is also facing more than 14 wind-up proceedings in the Delhi high court.
Era Infra is among the 12 cases where banks have moved NCLT following the 13 June directive of the Reserve Bank of India (RBI). Barring Era Infra, NCLTs have admitted cases against 11 other borrowers. During its hearing, various other orders of the tribunal which dealt with similar cases were cited, according to the order.
One such case concerned Alok Industries Ltd, among the 12 cases identified by RBI for insolvency. Here, the Ahmedabad bench of NCLT admitted the insolvency proceedings because no order was passed on the pending wind-up petitions by the high court.
A similar stance was taken in the ICICI Bank Ltd versus ABG Shipyard Ltd case. Here, the Ahmedabad NCLT considered the issue of pending winding up petitions before the Gujarat high court but gave the same reasoning for admission of petitions under IBC.
However, the special bench order observed that various other orders passed by principal bench of New Delhi NCLT, which had said that in cases where wind-up petitions are pending, it would not be conducive for NCLT to trigger an insolvency process. This is because there is a likelihood of conflict of interest between the official liquidator and the insolvency resolution professional.
The special bench hearing Era Infra’s case took the stand that given the differing views in orders heard by them, the case should be placed before the president of the tribunal for transferring it to a larger bench.
The default amount claimed by Union Bank is Rs681.04 crore, along with an overdue external commercial borrowing of $11.97 million up to 31 May. This is debt owed to the bank and not to a consortium of lenders.
As the next step, the tribunal president will form a larger bench that will decide the matter, said Manoj Singh, founding partner of Singh and Associates, a law firm that represents Era Infra. “The larger bench so formed will again hear the arguments of the parties in order to decide.”
- Davos Diary, 22 January 2017: India is everywhere in this ski town
- Food tech-startup HungerBox raises $2.5 million from LionRock Capital, others
- India sees scope for more integration among state energy companies
- Uber CEO Dara Khosrowshahi sees flying cars across US skies within 10 years
- World Gold Council investigates standard for gold kilobars