Adisri Commercial, the erstwhile promoter company of two insolvent Srei firms, on Monday urged the Kolkata bench of the National Company Law Tribunal (NCLT) to set aside its order admitting the two debt-laden firms for insolvency proceedings, and consider application on the fresh settlement offer to the creditors.
Adisri Commercial, which has around 60% stake in Srei Infrastructure Finance (SIFL), questioned the NCLT’s order on initiating the corporate insolvency resolution process (CIRP) against SIFL and its subsidiary Srei Equipment Finance (SEFL) since it disclosed “error apparent on face of records”, as the dates of defaults mentioned in the order allegedly fell within a period when initiation of the corporate insolvency resolution process (CIRP) is barred under Section 10A of the Insolvency and Bankruptcy Code.
Submitting before the NCLT Kolkata bench, counsels appearing for Adisri Commercial sought recalling of the original admission order for insolvency proceedings as the default date mentioned in the order fell within the “blackout period” under Section 10A of IBC.
Notably, Section 10A was introduced in September 2020, which barred initiation of CIRP of a corporate debtor for any default arising on or after March 25, 2020 for a period of six months or such further period, not exceeding one year from such date. This step was taken, inter alia, to assist and aid the functioning of corporate persons which might face default owing to the economic slowdown and unprecedented situation due to Covid 19.
Adisri Commercial also urged the tribunal to consider its application on the fresh settlement offer to the creditors to withdraw the two companies from the ongoing CIRP. It challenged the administrator’s decision not to send the fresh settlement offer to the consolidated committee of creditors (CoC).
Notably, the Kanorias, the erstwhile promoters of two Srei companies, proposed to withdraw SIFL and SEFL from insolvency proceeding under Section 12A of the IBC. The appeal was made through Adisri Commercial. As per the resolution offer, creditors’ entire claim of around Rs 32,000 crore would be repaid using multiple financial instruments such as upfront cash, NCDs, OCDs and equity over time. Kanorias have claimed that their fresh settlement offer to the creditors is the “highest” among existing bid offers.
The administrator, Rajneesh Sharma, however, returned the resolution plan, stating that he was not the “competent authority” to accept the plan under Section 12A of the IBC.
The counsels for Adisri Commercial on Mondy urged the NCLT to hear the case under Section 12A of IBC before it takes up the matter of approved resolution plan of National Asset Reconstruction Company (NARCL). Advocates Jishnu Chowdhury and Rishav Banerjee appeared for Adisri.
Both the matters will come up for further hearing on March 3.