NCLAT Rejects Plea Against Approval Of Resolution Plan Of MBL Infrastructures
The National Company Law Appellate Tribunal has dismissed petitions filed by four dissenting banks against an order of the Kolkata bench of the NCLT approving the resolution plan for MBL Infrastructures Ltd. submitted by its promoter.
A two-member NCLAT bench headed by Chairperson Justice SJ Mukhopadhaya declined the appeals filed by IDBI Bank, Bank of Baroda, Bank of India and State Bank of India, saying the Committee of Creditors of MBL Infrastructures Ltd. had approved the resolution plan by the firm's Chairman and Managing Director Anjanee Kumar Lakhotia with 78.5 percent votes favouring it.
Regarding the banks’ plea that the resolution plan was not viable, the appellate tribunal said the CoC has approved the plan only after considering a techno-economic report relating its viability and feasibility for the company.
“We find no merit in these appeals,” the NCLAT said. “They are accordingly dismissed.”
“As the CoC by majority voting share of 78.5 percent, has approved the plan after taking into consideration the techno economic report relating to viability and feasibility of the resolution plan and viability of MBL Infrastructures, this Appellate Tribunal cannot sit in appeal in absence of any discrimination or unequal treatment of similarly situated Financial Creditors or Operational Creditors,” it also observed.
The dissenting financial creditors had also alleged that Lakhotia was ineligible to submit a resolution plan under Section 29 A of the Insolvency and Bankruptcy Code, which bars promoters from bidding for companies in case of a default.
On this, the NCLAT said it has already decided on the issue of eligibility of Lakhotia in his favour following an appeal filed by RBL Bank and Punjab National Bank in this matter.
“We find that the appellants earlier raised the question of ineligibility of the resolution applicant (Lakhotia) which was not accepted by this appellate tribunal and the appeals preferred by the two Appellant Banks were dismissed as withdrawn without any liberty to raise such issue again before this appellate tribunal,” it said.
Section 29 A of IBC deals with persons not eligible to be resolution applicants for a company undergoing the resolution process.
The Kolkata bench of the National Company Law Tribunal had ordered to initiate insolvency proceedings against MBL Infrastructures in March 2017 over a plea filed by RBL Bank.
Later, the NCLT had on April 18, 2018, approved the resolution plan by Lakhotia and this was challenged by the four banks before NCLAT.
According to the revised resolution plan submitted by Lakhotia, he offered to pay Rs 1,890 crore to lenders.
The company’s financial creditors have a claim of Rs 1,480.17 crore, while operational creditors have outstanding dues of Rs 157.91 crore.
The company had a liquidation value of Rs 269.90 crore.
After implementation of the resolution plan, the equity shareholding of the promoters would increase from 21.73 percent to 80.88 percent.