The National Company Law Appellate Tribunal (NCLT) on Wednesday rejected Srei Infrastructure Finances’ promoter Adisri Commercial’s plea challenging the Kolkata National Company Law Tribunal’s 8 October 2021 insolvency order.
In October last year, the NCLT’s Kolkata bench in its order allowed the Reserve Bank of India’s application under section 227 of the Insolvency and Bankruptcy Code, 2016, thus admitting Srei Equipment under Corporate Insolvency Resolution Process (CIRP).
Prior to which RBI superseded the boards of Kolkata-based Srei Infrastructure Finance and its subsidiary Srei Equipment Finance due to concerns over governance and default on loan repayment obligations.
According to the NCLAT order, the Promoters submitted that substantial injustice was caused to Srei and its shareholders by the Kolkata NCLT’s October order which admitted the company into insolvency. This was done without even having to serve the notice to the company or its Promoters as required under law.
Adding that a copy of the petition of insolvency was not served on the superseded board of Srei thus denying the opportunity to the Promoters to defend the matter on merits.
Following which the Promoters then presented memo of the appeal in the NCLAT office on 22 November 2021 after certain scrutiny, defects were found in the appeal and were informed to the Promoters.
The Promoters thereafter refiled the memo of the appeal on 19 October 2022 after a delay of 321 days along with an interlocutory application seeking condonation of delay in refiling the appeal.
A bench led by Justice Ashok Bhushan and Barun Mitra said “The bench finds no merit in the application for seeking condonation of 321 days delay in refiling the appeals, the same are dismissed. In view of the dismissal of the application for condonation of delay in refiling the appeal, both memo of appeals are rejected”.
We are of the considered view that the grounds cited to explain the 321 days delay when viewed against the parameters of timely, effective and efficient resolution as envisaged in the IBC, fall hopelessly short of meeting the desirable standards of being adequate and efficient.
Promoters claimed that the delay was occasioned by bonafide and genuine reasons. They cited pandemic and construction work to be the reason for the delay in refiling.
The tribunal however, held that, it needs to be fully satisfied that the delay was unavoidable and the applicant (Promoters) was consistently diligent in pursuing the matter.
The two lending companies of Srei Group—Srei Equipment and Srei Infrastructure owe around ₹30,000 crore to creditors, of which the share of banks is ₹20,000 crore rupees and rest is in the form of non-convertible debentures, external commercial borrowings, among others.
On Tuesday, the lenders of two Srei companies has extended the deadline for submission of the revised resolution plans till 24 December 2022 after the resolution applicants asked for additional time.
The three resolution applicants include a consortium of Varde Partners and Arena Investors, National Asset Reconstruction Company (NARCL) and Authum Investment and Infrastructure — are expected to submit their revised resolution plans with higher financial bids for acquiring the two insolvent Srei companies, Srei Infrastructure Finance (SIFL) and Srei Equipment Finance (SEFL), Mint reported.
