BackVideocon approaches NCLT against SBI move to change bankruptcy plea
Rejecting Videocon's intervention, NCLT Mumbai ruled that SBI's bankruptcy petition will be heard on its merits and posted its hearing on 23 April
Premium
Mumbai: A dedicated bankruptcy court on Wednesday rejected an intervention sought by Videocon Industries Ltd against State Bank of India (SBI) amending its original bankruptcy petition.
The Venugopal Dhoot controlled company had alleged that in the guise of minor changes, SBI made several changes to the original petition, meaning the original plea was defective and hence needed to be rejected.
Rejecting the intervention, justice M.K Shrawat of the Mumbai bench of National Company Law Tribunal (NCLT) ruled that the petition will be heard on its merits.
“I am of the view that litigation should not be thrown out on merely technical grounds and it has to hear on the basis of merits," ruled the judge, posting the case for hearing on 23 April.
The country’s largest bank SBI had filed its insolvency petition against Videocon Industries in January at the NCLT. Videocon is in the so-called second list of 28 defaulters that the Reserve Bank of India (RBI) had directed for resolution under the new bankruptcy code.
Earlier, the counsel representing the Aurangabad-based white goods maker had argued that the bank had only sought permission to change details of the resolution professional, but had instead submitted a heavily amended petition, proving the original plea was flawed.
Zal Andhyarujina, representing Videocon Industries, further argued that at least 23 changes were made in the original petition including correction of dates of default and number of days across several loan facilities. The counsel further asked the court to either strike down the amendments and reject the petition, or call for a fresh petition to be drawn up by the bank. Counsel representing SBI, insisted the company had yet to present any evidence of prejudice following the corrections.
“There is no change in the amount of the default. Also, the company has not said how it was prejudice due to these amendments," argued Saloni Kapadia, counsel representing the Bank further adding that at the time of making changes, the company had consented to make those ‘clerical’ changes.
Videocon Telecommunications Ltd, a subsidiary of Videocon Industries, which is also facing bankruptcy proceedings, has also sought similar relief against the amendments made by SBI. However, the case is being heard in front of another bench where the order is reserved.
Earlier in February, Videocon Industries had also moved the Bombay high court where it submitted a writ petition asking for a stay on bankruptcy proceedings initiated by SBI in NCLT.
Videocon had moved the high court against RBI’s decision not to extend the timeline as requested by SBI and the Joint Lenders’ Forum so as to re-rate Videocon’s restructuring proposal following changes in cash flows after subsequent changes in government import duty policy.
According to Videocon Industries’ FY17 annual report, the company is liable to repay the liability of other group companies to the extent of Rs5,082 crore as on 31 March 2017.
The company’s total debt stood at Rs19,506 crore as of March last year.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
