The Principal bench of the NCLT reserved its order in the insolvency proceedings against Era Infra Engineering filed by Union Bank of India.
The Principal bench of the National Company Law Tribunal (NCLT) in New Delhi on Tuesday reserved its order in the insolvency proceedings against Era Infra Engineering filed by Union Bank of India. The bench said it will decide on “jurisdictional issues” of the case given several winding-up petitions against Era were pending before the Delhi High Court.
“The order on the jurisdictional issue is reserved,” Ahasan Ahmad, counsel for Union Bank of India, said, adding that there were 18 winding-up petitions pending against the company.
Recently, the NCLT bench in Ahmedabad had observed in the SBI versus Alok Industries case that since the winding-up petitions had not been admitted, the Insolvency and Bankruptcy Code (IBC) could be invoked. In the case of Era Infra too, the winding-up petitions have not been admitted by the Delhi High Court.
On July 25, the NCLT had sought a clarification from Union Bank of India on the maintainability of the bankruptcy petition against Era and reserved its order. Era Infra’s counsel had argued that if the winding-up petitions are admitted by the HC, the application under Section 7 of the IBC filed by the bank may become infructuous.
Era Infra owes Union Bank of India Rs 681 crore in term loans and $11 million in external commercial borrowings.
The company’s total debt at the end of March 2016 stood at Rs 10,065 crore. It reported a net loss of Rs 1,295 crore in FY17, on the back of Rs 1,211 crore in revenues.
Era Infra is among the 12 companies referred by the Reserve Bank of India (RBI) to NCLT benches across the country. The RBI had on June 13 asked banks to refer a dozen troubled companies – with a combined debt of close to Rs 2.4 lakh crore – to the NCLT, following several failed attempts at loan recovery.
Of these, nine cases, including Bhushan Steel, Essar steel, Bhushan Power and Steel, have been admitted, while insolvency petitions against Lanco Infratech, Jaypee Infratech and Era Infra are being heard.