NCLAT Directs NCLT Ahmedabad To Decide On Insolvency Plea Against Sintex Industries Within A Week
The National Company Law Appellate Tribunal on Monday directed the Ahmedabad bench of National Company Law Tribunal to decide within a week whether to admit or reject an insolvency plea filed against Sintex Industries by Punjab National Bank.
A two-member NCLAT bench headed by Acting Chairperson Justice BL Bhat said despite its earlier direction to NCLT on December 2020 to pass an order of 'admission' or 'rejection' over the public sector bank's plea, the tribunal "overlooked" it.
"Despite the direction given by this Appellate Tribunal... decided on December 21, 2020, the Adjudicating Authority failed to pass an order of 'admission' or 'rejection' in respect of such Application in terms of mandate of Section 7(4) & (5) of the I&B Code and instead embarked upon a course of dealing with an Application of Corporate Debtor (Sintex) at the pre-admission stage transgressing timelines prescribed under Insolvency and Bankruptcy Code and overlooking the direction passed by this Appellate Tribunal," it said.
This was "unfortunate" and dealing with the matter in such a manner is unwarranted, the NCLAT added.
"Without expressing any opinion on the merits of the case, we direct the Adjudicating Authority to pass an order of 'admission' or 'rejection' of the Application filed by the Appellant under Section 7 of the I&B code within one week and report compliance to this Appellate Tribunal," the NCLAT said.
Under Section 7 of the IBC, a financial creditor can get insolvency proceedings initiated against a corporate debtor.
Earlier on Dec. 12, 2020, the NCLAT had directed NCLT to "expedite the matter and make all endeavours for concluding the Resolution Process within the timelines prescribed under I&B Code".
The NCLAT direction came on the plea filed by PNB alleging that the timelines under the IBC have not been adhered to and the matter is getting inordinately delayed by the Ahmedabad bench of the NCLT.
Earlier on Sept. 30, PNB had declared its Rs 1,203.26 crore exposure to Sintex Industries as fraud.
Sintex Industries is a leading producer of plastic water tanks and manufacturer of corduroy fabrics.