1 min read.Updated: 09 May 2018, 12:04 AM ISTAditi Singh
Union Bank of India had filed a plea in NCLT seeking initiation of insolvency proceedings against Era Infra for recovery of Rs681.04 crore, along with an overdue external commercial borrowing of $11.97 million
New Delhi: The National Company Law Tribunal (NCLT) principal bench on Tuesday admitted Union Bank of India’s (UBI’s) plea seeking initiation of insolvency proceedings against Era Infra Engineering Ltd for recovery of Rs681.04 crore, along with an overdue external commercial borrowing of $11.97 million.
The order on admission of the plea was reserved by a bench headed by President Justice M.M. Kumar on 25 April. Era Infra is the last of the 12 large loan defaulters, identified by the Reserve Bank of India last June to be referred to bankruptcy courts.
The admission kick-starts a time-bound 180-day insolvency resolution process, which can be extended by an additional 90 days, for debt-ridden Era Infra. As a result, management control would be taken away from promoters and be vested with a resolution professional appointed by NCLT. In case the “insolvency" is not resolved during this time period, firms would go into liquidation.
Pursuant to the Insolvency and Bankruptcy Code, the resolution professional would now announce the initiation of the corporate insolvency resolution process and call for submission of claims.
Earlier, Era Infra had objected to the initiation of insolvency proceedings against it in the light of several pending company petitions before the Delhi high court seeking “winding up" of the corporate debtor.
Holding that there is no bar on NCLT to trigger an insolvency resolution process on an application filed under Sections 7, 9 and 10 if a winding up petition is pending unless an official liquidator has been appointed and a winding up order has been passed, NCLT decided to resume hearing on Union Bank of India’s plea.