McLeod Russel: NCLT allows withdrawal of CIRP after promoter-creditor settlement

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September 08, 2021 4:00 AM

Earlier, NCLT, New Delhi, vide its order dated August 6, had admitted the insolvency application filed by Techno Electric & Engineering under Section 7 of the Insolvency and Bankruptcy Code (IBC). Under the provision, the bench had also appointed an interim resolution professional for McLeod.

“The incorporation of Devas itself was with fraudulent motive and unlawful object to collude and connive with then officials of Antrix and to misuse/abuse process of law, to bring money into India and to divert it under dubious methods to foreign countries,” the NCLT had ordered.“The incorporation of Devas itself was with fraudulent motive and unlawful object to collude and connive with then officials of Antrix and to misuse/abuse process of law, to bring money into India and to divert it under dubious methods to foreign countries,” the NCLT had ordered.

In a major relief to the financially-stressed Williamson Magor group, the National Company Law Tribunal (NCLT) has given its approval to withdrawal of corporate insolvency resolution process (CIRP) against its group company McLeod Russel after its promoters reached a settlement with Techno Electric & Engineering, one of its financial creditors.

Earlier, NCLT, New Delhi, vide its order dated August 6, had admitted the insolvency application filed by Techno Electric & Engineering under Section 7 of the Insolvency and Bankruptcy Code (IBC). Under the provision, the bench had also appointed an interim resolution professional for McLeod.

The financial creditor had filed the insolvency application after McLeod, one of the world’s largest tea producers and a group company Williamson Magor, had defaulted on repayments of term loans of Rs 100 crore and interest thereon.
The NCLT, New Delhi, vide its order dated September 3, has withdrawn the matter, McLeod informed in a stock exchange filing on Tuesday.

Earlier, counsels of McLeod and Techno Electric submitted before the tribunal that they were bound by the terms and conditions of their agreement. A copy of the agreement was produced in a sealed cover before the tribunal.

“It is made clear that suspended board of directors/corporate debtor are relieved from the clutches of Corporate Insolvency Resolution Process and the Interim Resolution Professional is discharged from his functions, duties, and responsibilities…” the NCLT said in its order dated September 7.

Following the tribunal’s August 6 insolvency commencement order, Aditya Khaitan, promoter of the tea company, had appealed to the National Company Law Appellate Tribunal (NCLAT) for a stay on the CIRP initiation. NCLAT, however, hadn’t granted a stay but admitted the plea.

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