The National Company Law Appellate Tribunal (NCLAT) on Saturday stayed an order passed by the National Company Law Tribunal (NCLT) to initiate corporate insolvency resolution process against Eastern Coalfields (ECL), a subsidiary of state-run Coal India (CIL). The Kolkata bench of the NCLT on December 19 admitted an insolvency petition, filed by the Hinduja Group-controlled Gulf Oil Lubricants India (GOLIL), against ECL under Section 9 of the Insolvency & Bankruptcy Code (IBC), as the coal miner refused to pay the interest amount on the original debt towards goods supplied. Although ECL had already paid the principal sum of around `84.71 lakh to GOLIL, one of its operational creditors, it did not pay the amount of interest at the rate of 18% per annum.
Following NCLT’s order, Coal India moved NCLAT, challenging the order. Appearing before a two-member NCLAT bench, headed by chairperson Justice SJ Mukhopadhaya, on Saturday, the Coal India counsel said, “The principal amount had already been paid and as per the terms of the agreement/contract, no interest is payable (to GOLIL).” Issuing a notice to GOLIL, the appellate tribunal asked it to file its reply by December 26 and listed the matter for January 29. “Until further orders, the operation of the impugned order dated December 19 by NCLT Kolkata bench shall remain stayed,” the NCLAT said in its order on Saturday.
Notably, pronouncing the order on December 19, Justice Gosavi of NCLT Kolkata bench said, “The application filed by the operation creditor under Section 9 of the Insolvency & Bankruptcy Code, 2016, is hereby admitted for initiating the Corporate Insolvency Resolution Process in respect of Eastern Coalfields Ltd. Moratorium order is passed for a public announcement as stated in Section 13 of the IBC, 2016.”
After hearing the arguments from the counsels for GOLIL and ECL, Justice Madan B Gosavi of NCLT Kolkata bench had observed that “considering the facts and materials on record, I hold that the corporate debtor, Eastern Coalfields Ltd is liable to pay interest to the operational creditor, which has not been paid in spite of demand. The operational creditor complied with other requirements under Sections 9(3)(b) and 9(3)(c) of the I&B Code.”
Source: Financial Express, December 23,2018