The Ahmedabad bench of National Company Law Tribunal (NCLT) on Tuesday issued a notice to Essar Power after L&T Infrastructure Finance Company approached it to initiate insolvency proceedings against the Essar Group company.
L&T has approached the two-member bench comprising Harihar Prakash Chaturvedi and Manorama Kumari for non-repayment of `45.5 crore in dues. The bench, in its notice asked Essar Power, to present its arguments before L&T’s plea is admitted. The matter will come on board in April this year.
The L&T group company had lent the amount to Essar Power Gujarat, subsidiary of Essar Power. As the subsidiary defaulted on its debt repayment, L&T Infrastructure approached Essar Power for being the guarantor. However, the parent company too failed to repay the dues and L&T decided to file interlocutory application under Section 7 of the Insolvency and Bankruptcy Code (IBC) to start corporate insolvency resolution process against the Essar Group company.
It is worth mentioning that another Ruia promoted company Essar Steel India (EISL) is facing insolvency proceedings in the same court. ESIL was on the first list of 12 defaulters referred for insolvency under IBC.
Source: Financial Express, March 7, 2019