NCLT directs power distribution firm not to take any coercive action against Sterling Biotech – The Economic Times

Clipped from: https://economictimes.indiatimes.com/news/company/corporate-trends/nclt-directs-power-distribution-firm-not-to-take-any-coercive-action-against-sterling-biotech/articleshow/82999075.cmsSynopsis

Sterling Biotech’s liquidator had approached the Mumbai bench of the National Company Law Tribunal (NCLT), with a plea to restrain Madhya Gujarat Vij Company Ltd (MGVCL) from cutting its connections since they are trying to sell the company as a going concerned.

The dedicated bankruptcy court on Thursday directed a power distribution company in Gujarat, not to take any coercive action against Sterling Biotech Ltd until further order. The company promoted by Chetan and Nitin Sandesara is under liquidation and owes over Rs 8,100 crore to its lenders.

Sterling Biotech’s liquidator had approached the Mumbai bench of the National Company Law Tribunal (NCLT), with a plea to restrain Madhya Gujarat Vij Company Ltd (MGVCL) from cutting its connections since they are trying to sell the company as a going concerned.

“The disconnection notice has sent by the electricity department. We are paying our all dues regularly but now the MGVCL is seeking extra cost for enhancement of the infrastructure,” said Sandeep Bajaj, an advocate for the liquidator. “The company is facing liquidation but still, it is a going concern and hence we are seeking the tribunal’s intervention to restrain the electricity company from taking any coercive action.”

The division bench preceded over by a judicial member Janab Mohammed Ajmal and a technical member V Nallasenapathy has directed the MGVCL to file its response in the case and has adjourned the case to June 10. The tribunal has also directed the power company, not to take any coercive action until that time.

The company was admitted for liquidation on May 8, 2019.

Currently, Sterling promoters Chetan and Nitin Sandesara are absconding and believed to be in Africa. The Central Bureau of Investigation (CBI), Enforcement Directorate (ED) and the income tax department are looking into the dealings of the promoters. Last year in June, the Enforcement Directorate had attached properties of over Rs 9,700 crore owned by Sandesaras.

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