A special bench of the National Company Law Tribunal (NCLT) on Thursday reserved its order in the insolvency petition against Era Infra Engineering filed by Union Bank of India. Era Infra informed the bench on Thursday that insolvency proceedings can be initiated even as winding-up petitions were pending against before High Courts. The insolvency application, filed by the lender under Section 7 of the Insolvency and Bankruptcy Code (IBC), is pending for admission before the NCLT since June. The petition was referred to a larger bench headed by the tribunal’s president Justice M M Kumar in August. The bench, which has been hearing the Union Bank vs Era Infra case along with four other related cases, is trying to decide whether the corporate insolvency resolution process can be initiated in the face of winding up proceedings pending before High Courts against the same corporate debtor.
Era Infra’s counsel Manoj Kumar Singh argued that IBC is a complete code and is bound to prevail over any other conflicting law. Moreover, the code confers exclusive jurisdiction on the tribunal to decide upon matters before it under the IBC. Singh relied on recent decisions of different High Courts and the Supreme Court where proceedings against the corporate debtor, pending before them, had been stayed or adjourned sine die in view of the insolvency application being admitted and the moratorium being declared under the IBC. Era Infra is among the 12 companies referred to NCLT benches across the country after the Reserve Bank of India (RBI) asked banks to refer them to the NCLT. The RBI, had on June 13, asked banks to refer a dozen troubled companies —with a combined debt of close to R2.4 lakh crore—to the NCLT, following several failed attempts at loan recovery.