Various banks, including Kotak Mahindra, on Monday moved the Supreme Court seeking to intervene in the Amtek Auto insolvency case. In its intervention application, Kotak, together with merged bank ING Vysya Bank, told a Bench of Justice Arun Mishra that its claim for Rs 244 crore should be entertained now as the liquidation proceedings have been stayed against the bankrupt company.
The Bench posted the bank’s plea for further hearing in January. While the apex court had on September 6 stayed the NCLAT decision ordering liquidation of the debt-ridden firm, it ordered the committee of creditors (CoC) last week to invite fresh bids for Amtek Auto within a month.
The order had saved the company from liquidation after no resolution was found within the 270-day deadline, as UK-based Liberty House, the successful bidder, backed out citing technical reasons. Amtek featured on the first list of 12 companies that were referred by the RBI for initiating insolvency process in 2017.
The National Company Law Appellate Tribunal had not decided its claim plea on merits as the appellate tribunal was of the view that since Amtek Auto had been ordered to be liquidated, Kotak should now file its fresh claim before the liquidator, the application stated, adding that the apex court is now deciding the case and the decision will have a bearing on its claims.
Kotak said it and the merged bank had extended financial facilities to Amtek Auto and Amtek Crankshafts in 2014 and the loan given to the debt-laden firm was declared as NPA as per the RBI guidelines. While Kotak in August 2017 had filed its total claim for over Rs 244 crore, the resolution professional (RP) had accepted claim for only Rs 37.46 crore and remained silent on the other Rs 201-crore claim.
The RP had later rejected the bank’s claim on the ground that the invocation of corporate guarantee after the insolvency proceedings was initiated was contrary to the provisions of IBC and a claim based on an uninvoked guarantee can ‘at best’ be treated as a contingent claim without entitlement to voting rights.
Source: Financial Express, December 10, 2019