New Delhi: A special bench of the National Company Law Tribunal (NCLT) on Thursday reserved its ruling on whether to initiate insolvency proceedings against Era Infra Engineering Ltd, when winding-up petitions are pending against the company at another forum.

The three-judge bench hearing an insolvency petition filed by Union Bank of India against Era Infra Engineering concluded hearing arguments on the matters.

The company is among the 12 loan defaulters identified by the Reserve Bank of India (RBI), for the launch of insolvency proceedings by creditors.

The default amount claimed by the bank is Rs681.04 crore, along with an overdue external commercial borrowing of $11.97 million, up to 31 May 2017.

This is debt owed to the bank and not to a consortium of lenders.

“The object of the tribunal is to provide an opportunity….to rehabilitate the company," said M.M. Kumar, president of the National Company Law Tribunal.

On Thursday, the lawyer representing Era Infra said that the Insolvency and Bankruptcy Code (IBC), 2016, is very specific that debt resolution efforts should precede liquidation.

“We are arguing in favour of a resolution plan under the IBC and we are confident that a resolution is achievable", said Manoj K. Singh, founding partner of Singh and Associates, a law firm that represents Era Infra Engineering.

Under the Insolvency and Bankruptcy Code, debtors and creditors are supposed to agree to a time-bound resolution of debt to avoid insolvency.

A company is granted 180 days, which may be later extended to 270 days, to submit a debt resolution plan to the tribunal.

The resolution plan should provide for payment of insolvency resolution costs, repayment of debt to operational creditors, management of affairs of the company after approval of the resolution plan, and implementation and supervision of the resolution plan.

“If the tribunal refuses to entertain the application for resolution of the corporate insolvency due to pendency of the case before the Delhi high court, a peculiar situation may arise where the corporate debtor and the creditors are deprived of an important remedy, namely resolution of insolvency," Union Bank said in its submission.

More than 14 winding-up petitions are pending before the Delhi high court against Era Infra Engineering.

These have been filed by various operational and financial creditors of the company. Union Bank of India is not among them.