NCLT asked to deliver final verdict on Bharati Defence & Infrastructure liquidation case within a week
The National Company law Appellate Tribunal (NCLAT) has asked the Mumbai Bench of the National Company law Tribunal (NCLT) to pass an order within a week on liquidation of Bharati Defence & Infrastructure Ltd, a Mumbai-based ship building and fabrication company.
The appellate tribunal took cognizance of the fact that the NCLT had reserved an order on 29 June 2020, but is yet to deliver the final order even after lapse of five months. The appellant – Edelweiss Asset Reconstruction Company, also a financial creditor – argued in the tribunal that “the value of the liquidation estate is further depreciating and delay will result in further erosion of value of the assets thereby causing immense loss.”
It’s been almost two years since the NCLT had ordered the liquidation of Bharati Defence & Infrastructure Ltd and yet the liquidation of the company is hanging fire, thanks to an application for Scheme of Compromise with the creditors moved by one of the shareholders under Section 230 of the Companies Act, 2013.
While the Scheme of Compromise failed to materialize as one of the interested parties failed to make the requisite payment on time, the NCLT on 29 June had reserved an order but has not delivered a verdict in this regard.
The NCLT had first ordered the liquidation of the company in January 2019 after it refused to approve the resolution plan of Edelweiss ARC despite the Committee of Creditors approving the plan by a vote share of 94.3%.
Insolvency application against Bharati Defence & Infrastructure Ltd was filed by Edelweiss ARC in June 2017. The corporate debtor owed over close to Rs 11,500 crore, a majority (Rs 9,500 crore) of which was due to Edelweiss ARC. Edelweiss ARC had also submitted a resolution plan which was approved by the CoC, but the NCLT rejected it as it found is not practical and viable.
