The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday dismissed the insolvency petition of Union Bank of India against Rolta India, citing the Supreme Court’s judgment striking down the Reserve Bank of India’s (RBI) February 12 circular as ultra vires.
“We are writing to appraise you that on Wednesday, May 01, 2019, the hon’ble National Company Law Tribunal — Mumbai has passed an order dismissing the insolvency petition filed by Union Bank of India as not maintainable in view of the judgment delivered by the hon’ble Supreme Court of India in the case of Dharani Sugars vs. Reserve Bank of India,” Rolta India said in a notification to the stock exchanges on Thursday.
The text of the NCLT order is yet to be uploaded on the Insolvency and Bankruptcy Board of India’s (IBBI) website. Union Bank could not be immediately reached for a comment.
FE reported on September 25, 2018 that Union Bank had filed an insolvency petition against Rolta India in the Mumbai bench of the NCLT.
The company’s total debt stood at `2,558 crore at the end of September 2018, down from `5,085 crore at the end of March 2018.
With GMR Rajahmundry and GVK Power (Goindwal Sahib), Rolta India was among the few companies which had been dragged to the insolvency tribunal by banks after the six-month period to resolve them by other means ended on August 27, 2018.
In its circular dated February 12, 2018, the RBI had directed banks to find resolutions for all non-performing assets (NPAs) of over `2,000 crore within 180 days from the date of default, failing which they would have to refer these accounts to the NCLT. The circular came into force on March 1, 2018 and was struck down on April 2, 2019 on a plea by a clutch of power producers, textile and sugar manufacturers and the shipping industry.
Another of Rolta India’s lender, Bank of Baroda, had in November put its `287-crore exposure to the company on sale to asset reconstruction companies.
Lenders have been known to put on sale exposures to cases headed to the NCLT, or being resolved under the IBC for quick cash-based recoveries, in an attempt to avoid delays in resolution and excessive litigation.
Source: Financial Express, May 03, 2019