The Ahmedabad bench of the National Company Law Tribunal (NCLT) on Monday directed the resolution professional (RP) for Alok Industries to reconsider the resolution plan submitted by Reliance Industries (RIL) and JM Financial ARC. The tribunal also asked the RP not to raise new issues related to the resolution plan for the time being and said it will hear the case on June 25. The RP for Alok Industries is Ajay Joshi.
RIL and JM Financial ARC had submitted a resolution plan for Alok Industries that was rejected by the committee of creditors (CoC) as 30% of the votes were against the plan. To approve the resolution plan, 75% votes were required from the CoC. However, a recent amendment to the Insolvency and Bankruptcy Code (IBC) has lowered the threshold to 66% for approval of a resolution plan.
Following the amendment, employees of Alok Industries and a group of operational creditors have pleaded to the NCLT to accept the resolution plan, taking the amendment into account. The Alok Employees Benefit and Welfare Trust has also demanded rejection of the liquidation proposal filed by the resolution professional.
After hearing the arguments, the two-member bench comprising Manorama Kumari and HP Chaturvedi directed the resolution professional to reconsider the resolution plan. The Ahmedabad bench had admitted insolvency proceedings against the textile company under the IBC in July 2017.
The consortium of lenders is led by State Bank of India (SBI). As per the IBC, if no resolution plan is approved within the 270-day period, then the company will be liquidated. Other lenders to the company are Axis Bank, Corporation Bank, UCO Bank, Bank of Maharashtra, Life Insurance Corporation of India, Allahabad Bank, Union Bank, Dena Bank, Oriental Bank of Commerce and United Bank of India.