A gavel placed on a block for this arranged photograph (Source: Freepik)

NCLT Rejects ICICI Bank’s Plea To Initiate Insolvency Proceedings Against Era Infrastructure

The National Company Law Tribunal has rejected ICICI Bank Ltd.’s plea to initiate insolvency proceedings against Era Infrastructure (India) Ltd. on the grounds of "duplicacy" of claims.

A two-member bench headed by NCLT President Justice MM Kumar observed that ICICI Bank has already raised similar claims against its parent company Era Infra Engineering Ltd., which is currently undergoing resolution process.

The tribunal held that "on account of duplicacy" of the claims, the petition filed by ICICI Bank "can not be entertained".

"This is again raised for admission in the present proceeding. Such a course obviously is not permissible in law..." it said.

The tribunal observed that the application filed by ICICI Bank to initiate insolvency proceedings against Era Infrastructure was based on the same sets of facts and documents which the resolution professional of Era Infra Engineering had earlier rejected.

Later, the NCLT had on Dec. 6, 2018 directed the resolution professional of Era Infra Engineering to admit the said claims as financial debt of the company.

Era Infra Engineering was in the first list of 12 defaulting companies which was issued by the Reserve Bank of India, directing banks to recover debts through the Insolvency and Bankruptcy Code.

ICICI Bank had given a loan of Rs 240 crore to Era Infrastructure India. For the loan, its parent firm Era Infra Engineering had guaranteed the payments, which were later defaulted on.

Meanwhile, corporate insolvency was initiated against the parent firm Era Infra Engineering by the NCLT and its resolution professional had invited claims.

ICICI Bank had lodged its claim before the resolution professional placing reliance on securities and contractual comfort provided by Era Infra Engineering towards the entities and group companies related to it.

However, the resolution professional had rejected its claims on Sept. 13, following which ICICI Bank approached the NCLT. The tribunal had admitted ICICI Bank's plea on Dec. 6, 2018 and had directed the resolution professional to admit the claims.