Insolvency process against Nagarjuna Fertilizers remains suspended
The Chennai bench of the National Company Law Appellate Tribunal (NCLAT) has continued its stay on the Hyderabad NCLT’s 27 August 2021 order initiating corporate Insolvency Resolution Process against Nagarjuna Fertilizers and Chemicals Ltd.
The appellate tribunal will hear the case again on 19 January 2022.
A corporate insolvency resolution process had been initiated against Nagarjuna Fertilizers and Chemicals Ltd by a Switzerland-based operational creditor Key Trade AG in respect of a claim amounting to Rs.17 crore plus interest.
The Hyderabad bench of the NCLT had admitted the insolvency application of Key Trade on 27 August 2021, and appointed Cherukuri Venkata Ratnababu as the Interim Resolution Professional (IRP) for the CIRP.
Nagarjuna Fertilizers and Chemicals move NCLAT against the NCLT order and stayed the order on 14 September 2021. Ever since the CIRP has been in a motion of suspension.
It is to be informed that the London Court of international arbitration had passed an award against Nagarjuna Fertilizers in favour of Key Trade AG, Switzerland on 5 April 2016. Basis the award, Key Trade filed an execution petition in the High Court of Telangana along with a petition to attach certain properties. Accordingly, the High Court of Telangana attached the properties.
Aggrieved by this order, the Nagarjuna Fertilizers filed an SLP in the Supreme Court of India and the same was dismissed.
Basis the award the company had provided for the payment in its books of accounts. Subsequently, the High Court of Telangana as per the execution petition filed by Key Trade had asked the Company to earmark an amount of Rs 20 Crore. Accordingly, Nagarjuna Fertilizers complied with the order and set aside the amount with IDBI and SBI (Rs 14 crores and Rs 6 crores, respectively) to the extent of Rs 20 Crore as directed by the high court and the same was confirmed to High Court of Telangana.
After having complied with the execution petition and having set aside the money as directed by the high court the company does not owe any more dues to Key Trade. During this period, lDBI bank filed a claim petition in the High Court of Telangana stating that the current assets and fixed assets attached by High court were already mortgaged to the banks.
The High Court allowed the petition of lDBI. Key Trade filed an SLP on the file of Supreme Court of India and the same was pending disposal.
The company has cleared its dues as per the order of the high court by setting aside the money and the present cases in the High Court of Telangana and the Supreme Court are between the bank an Key Trade and the company does not have any say in that litigation. Key Trade latter filed a case against the company before NCL T suppressing the material facts that the amounts are secured by the orders of the High Court and that there exists no more liability from the company.
The NCLT passed an order in favour of Key Trade and admitted the claim on 27 August 2021.
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