The National Company Law Appellate Tribunal (NCLAT) has upheld NCLT’s liquidation order for Moser Baer Solar (MBSL). As the debt-ridden company failed to find any takers within the stipulated 270-day time-frame since initiation of the insolvency process in November 2017, the National Company Law Tribunal (NCLT) had, on May 30, 2019, ordered the company to go under liquidation.
The two-member NCLAT bench, headed by Justice S J Mukhopadhaya, however, ordered on Tuesday that MBSL can ‘continue as a going concern to ensure revival and resolution even during the liquidation process’. Challenging NCLT’s order, MBSL had approached NCLAT contending that the company was eligible for Rs 270 crore subsidy from the Central government and ‘the order of liquidation may affect the corporate debtor and if the Cental government comes to know that it has gone for liquidation, it may not allow subsidies’.
“More than 270 days have already been completed and in absence of any resolution plan, the order (by NCLT) of liquidation was passed. We find no illegality in the said order,” the NCLAT bench said. On January 15, 2019, ministry of electronics and information technology had informed the company that the disbursement of the subsidy was not being acceded. Following which, MBSL moved the high court, but the petition was dismissed on February 25, 2019.
The company then filed a review petition to a single bench which ordered Meity to re-examine the claim. “We are of the view that it is still open to Meity to release subsidies, if otherwise possible, as inspite of the order of liquidation, the corporate debtor is to continue as a going concern to ensure revival and resolution even during the liquidation process,” the NCLAT bench observed.
Source: Financial Express, July 25, 2019