The National Company Appellate Tribunal (NCLAT) has rejected the contentions of the Insolvency and Bankruptcy Board of India (IBBI) that challenged the order of the National Company Law Tribunal (NCLT), Mumbai Bench vide which the admission of GTL Infra was rejected.
GTL and GTL Infrastructure were taken to the NCLT under the provision of the Insolvency and Bankruptcy Code, 2016 by the Canara Bank. However, the NCLT dismissed the application for admitting GTL and GTL Infrastructure.
The Tribunal while rejecting the application, based its reasoning on the case of Vidarbha Industries Power v. Axis bank Limited (Civil Appeal No. 4633 of 2021) and observed that the business of the Corporate Debtor is a viable going concern and therefore, cannot be admitted under Bankruptcy.
Similarities were drawn between the case of Vidarbha Industries and GTL Infra and it was opined that “The Corporate Debtor (GTL Infra) has made claims aggregating to Rs. 13,393.83 crores against Aircel entities. Further, this Tribunal has directed to pay approx. Rs. 900 crores to the Corporate Debtor, same has been pending on appeal. Moreover, the Corporate Debtor has to recover Rs. 49.84 crores from Tata Teleservices; Rs. 20.38 crore from ATC and Rs. 351 from BSNL in pending arbitration proceedings. The amount received would be sufficient to pay the debt of the Petitioner (Canara Bank).”
The IBBI challenged the said order and alleged that dismissing the application despite proof of loan and default on the same would tantamount to setting a wrong precedent.
The NCLAT, however, did not concur with the contentions raised by IBBI and dismissed the petition as “infructuous”.
A separate petition has also been filed by the Canara Bank against the order of the NCLT, which will be heard by the NCLAT in March.
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(With input from news agency language)
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