The principal bench of the National Company Law Tribunal (NCLT) has admitted an application filed by the National Asset Reconstruction Company (NARCL) against Helios Photo Voltaic Ltd, earlier known as Moser Baer Photo.
Originally, public sector lender Oriental Bank of Commerce (now merged with the Punjab National Bank) had approached the tribunal after the company defaulted on its dues of Rs 859 crore. Subsequently, those loans were assigned to the state-sponsored bad bank, NARCL.
“We are satisfied that the present petition is maintainable and is within the period of limitation,” observed the division bench of Justice Ramalingam Sudhakar and a technical member Avinash K. Srivastava in its order of January 11. “Also, the financial debt is due and there is a default in payment of debt.”
The tribunal has also appointed ASC Insolvency LLP as its interim resolution professional.
The company is a manufacturer of solar energy equipment including optical media storage products, photovoltaic cells, thin film modules, panels and other products of electrical equipment along with wires and cables.
Before the tribunal’s order, the company had objected to the petition and argued that the sole intent of the petition was recovery and not for the resolution of debts of the corporate debtor.
“The intent of the legislature while enacting the IBC was the maximization of the value of assets of corporate debtors and the promotion of entrepreneurship while ensuring that the present proceedings are not misused as recovery proceedings,” argued the company. “IBC is not intended to be a substitute for a recovery forum and thus, cannot be used to jeopardize the financial health of an otherwise solvent company by pushing it into insolvency.”
The company had availed various loan facilities from the bank, which were guaranteed by Moser Baer India Ltd.
The company also argued that the aspect of maintainability of simultaneous proceedings against both the principal borrower and the corporate guarantor is pending before the Supreme Court and the tribunal should wait for the Apex Court to pass its final order.
“Stakeholders shall have a sigh of relief after a long battle, though the issue of parallel proceedings is still large before the Supreme Court, admission under insolvency process will give a fresh lease of life to all,” said Nipun Singhvi, an independent lawyer and managing partner of law firm NSA Legal.
A total of 7,058 companies across sectors were brought into administration until September-end this year, according to the latest data from the Insolvency & Bankruptcy Board of India (IBBI). Out of these, about 2001 cases are still undergoing the insolvency resolution process. The tribunals have so far approved 808 resolution plans and 2,249 cases were referred for liquidation in the absence of any viable resolution plan.
