A special bench of the National Company Law Tribunal (NCLT) in the capital on Friday decided to deliberate further on the maintainability of the insolvency petition against Era Infra Engineering.
A special bench of the National Company Law Tribunal (NCLT) in the capital on Friday decided to deliberate further on the maintainability of the insolvency petition against Era Infra Engineering. The petition, filed by Union Bank of India, was referred to a larger bench last month to decide if it could be admitted even if winding up petitions against the company were pending with the Delhi High Court. Stating that it does not want to take any ‘half-hearted’ decision on the maintainability issue, the three-member bench, headed by president justice MM Kumar, asked both the parties to submit comprehensive responses before October 13. The case will be heard on October 16.
Ramji Srinivasan, senior advocate appearing on behalf of Union Bank, argued that the petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) should be heard by the NCLT. He added that pendency of the winding up petitions should not be a deterrent as those have not been admitted. “The purpose of the IBC is to provide an opportunity for insolvency resolution before it goes into liquidation,” he argued.
In a recent observation in the State Bank of India (SBI) versus Alok Industries case, the NCLT bench in Ahmedabad, had noted that since winding up petitions had not been admitted, the IBC could be invoked. In the case of Era Infra too, the winding up petitions have not been admitted by the high court.Era Infra owes Union Bank Rs 681 crore in term loans and $11 million in ECBs. Meanwhile, Era Infra’s counsel had earlier argued that if the winding up petitions are admitted by the high court, the application under Section 7 of the IBC may become infructuous.