The Kolkata Bench of National Company Law Tribunal (NCLT) has granted an additional 20 days time for Adhunik Metaliks to complete its ongoing insolvency resolution process.
The company’s mandated 270-days period to complete the resolution process had ended on April 29, 2018. However, Sumit Binani, the resolution professional (RP) of the insolvent company, had urged NCLT to exclude around 20 days from the stipulated 270-day deadline so that the revised resolution plan of UK-based Liberty House could be considered.
“Period of 20 days stands excluded from the statutory period of 270 days and the RP is allowed to consider the plans before him within the period of 20 days from the date of this order (June 15) and submit them for approval of this Bench,” said an interim order by the Division Bench of the Tribunal, comprising Justices Jinan KR and Madan B Gosavi.
The matter would come up for further hearing on July 2 and the RP would be expected to submit the progress report. It is to be noted that the RP had received two resolution plans for Adhunik, one from Liberty House and the other from Maharashtra Seamless, a part of the DP Jindal Group.
The committee of creditors (CoC) had identified Liberty House as the highest bidder (H1) and decided to consider its resolution plan. However, Liberty House was declared ineligible to bid under Section 29A of IBC (Insolvency and Bankruptcy Code) in the insolvency process of another entity – Mtech Auto. CoC had therefore sought clarifications from the company regarding its eligibility.
Meanwhile, the plan of Maharashtra Seamless was rejected by CoC as it had suggested less value than the liquidation value of the company. Hence, at the CoC meeting held on April 25, it was unanimously decided that the RP should file an application for exclusion of 20 days from the statutory period of 270 days.
As per the IBC norms, an insolvent company is to be liquidated if no successful resolution plan is put in place during the stipulated 270-days period.
“We sincerely feel that the corporate debtor is the company as a going concern. There are 3,000 regular and 10,000 casual employees working in the company. If we do not permit exclusion of period of 20 days, then the situation that would emerge as if there will be no resolution plan before us and we have no option but to push the company in liquidation, thereby causing great prejudice to the workmen and other stakeholders,” the Division Bench noted.
The bankruptcy proceedings against Adhunik Metaliks, its subsidiary Orissa Manganese & Minerals (OMML), and group company Zion Steel were admitted by the Kolkata Bench of NCLT in August last year. The insolvency petitions had been filed by the State Bank of India.
The Tribunal has also granted exclusion of the 20 days from the 270-days for Zion Steel.