25 January 2019: The Kolkata bench of the National Company Law Tribunal (NCLT) on Tuesday declined to pass an interim order to revive the corporate insolvency resolution process (CIRP) as appealed by the lenders to bankrupt Adhunik Metaliks.
The committee of creditors (CoC) of Adhunik Metaliks had, on Monday, urged the bench to provide additional time for the completion of insolvency resolution process and to negotiate with H2 bidder who have come forward to take over the assets of the company.
It is to be noted that UK-based Liberty House, the successful resolution applicant, failed to make the upfront cash payment within the stipulated time. The second highest bidder (H2) — Maharashtra Seamless — has submitted an application to the CoC informing that it has the fund ready to take over the debt-ridden steel manufacturer, the CoC counsel told the bench.
Accordingly, the CoC prayed for appointment of Resolution Professional to take over the management of the corporate debtor and to negotiate with the offers made by the H2 bidders.
The Kolkata bench of NCLT had, in July, approved Liberty House’s resolution plan to acquire Adhunik Metaliks. From the approval date until the effective date Grant Thornton Advisory was appointed as the managing agency.
“To safeguard the interest of the corporate debtor till the resolution applicant took over possession of the corporate debtor and begin its operation, the managing agency has to take care of the operation. Here, in the case in hand, the resolution plan was not given effect so far. Litigation continues. Continuing litigation in between resolution applicant and the CoC is not a ground to appoint a Resolution Professional to take over the management of the affairs of the company..In view of the matter it appears to me that question of revival of CIRP cannot be entertained by me at this stage. So an interim order as prayed for cannot be passed,” Justice Jinan KR said.
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