National Company Law Tribunal’s (NCLT’s) Kolkata Bench has turned down a prayer from the committee of creditors (CoC) of Adhunik Metaliks to pass an interim order to revive the corporate insolvency resolution process (CIRP).
The CoC’s prayer was based on the H2 bidder, Maharashtra Seamless, expressing its interest in the company, afresh. Maharashtra Seamless and Liberty House had evinced interest in Adhunik Metaliks. However, Liberty House had emerged as the preferred bidder.
Maharashtra Seamless had written to Adhunik’s CoC recently, renewing its plan for Adhunik in the wake of Liberty House, the preferred bidder, dragging its feet on payment.
The order said that where the resolution applicant allegedly failed in giving effect to the terms of the plan and failed in paying the upfront amount, the remedy available to the CoC is to seek an order of liquidation upon establishing wilful default on the side of the resolution applicant. “In view of the matter, it appears to me that question of revival of CIRP cannot be entertained by me at this stage.”
The CoC had filed an application for liquidation earlier but had not pressed for it. It had said before the tribunal that liquidation was the ultimate situation. It had prayed for the revival of CIRP on grounds that the objective of the Insolvency and Bankruptcy Code (IBC) was resolution.
The Supreme Court order that upheld the code on Friday mentioned that the preamble (of the code) does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark.
Liberty’s plan was approved by the Kolkata Bench on July 17. The company was to make an upfront payment of Rs 410 crore within 57 days. On December 12, Liberty had showed readiness to put in Rs 100 crore in an escrow account. However, it was not done. Liberty’s main contention is a Rs 100 crore claim filed by MSTC, which is being heard in the National Company Law Appellate Tribunal (NCLAT).
NCLT Kolkata has now directed Liberty to file a reply affidavit within seven days. The CoC could file a rejoinder, if any, within seven days of receipt of the reply.
Source: Business Standards, January 26,2019