The National Company Law Appellate Tribunal (NCLAT) on Thursday dismissed a petition against the NCLT order allowing the initiation of insolvency resolution proceedings against Dadheech Infrastructures.
While upholding the National Company Law Tribunal's ruling in the case, the NCLAT also flagged that "unreasonable and unexplained delays in delivering verdicts are not desirable". The NCLT had reserved its order in December 2022 and pronounced the order only in June this year.
The Kolkata bench of the National Company Law Tribunal (NCLT) in June this year allowed initiating Corporate Insolvency Resolution Process (CIRP) against Dadheech Infrastructures on a plea filed by SREI Equipment Finance, which itself is undergoing CIRP.
The decision of the NCLT was challenged by way of a petition by Sanjeev Kumar Sharma, who was a director on the now-suspended board of Dadheech Infrastructures.
A two-member NCLAT bench said it was satisfied with the findings recorded by the Kolkata Bench of the National Company Law Tribunal (NCLT) that debt and default above the threshold limit had been established.
There is sufficient reason for admission of the main petition and admitting Dadheech Infrastructures into the rigours of CIRP, said the appellate tribunal.
Since 2007, Dadheech Infrastructures had a business relationship with SREI Equipment Finance, which was admitted under CIRP on October 08, 2021.
Claiming that an amount of Rs 131.35 crore was due on August 12, 2021, SREI Equipment Finance had filed the petition seeking CIRP against the company. Later, SREI Equipment Finance itself went into insolvency resolution proceedings.
According to Sanjeev Kumar Sharma's petition, the main petition was signed and verified by Projoy Chatterjee on the basis of a Power of Attorney (PoA) on March 31, 2021, executed by SREI Equipment Finance.
However, since SREI Equipment Finance had been admitted to CIRP and was taken over by the administrator, the PoA signed by the erstwhile management had become non-maintainable, as per Sharma.
This was opposed by SREI Equipment Finance who said the main petition filed by it was legally valid.
Even when SREI Equipment Finance's board was superseded on October 8, 2021, the Reserve Bank of India (RBI) appointed an administrator and Chatterjee’s authority to pursue legal matters on behalf of the company was affirmed by the administrator on October 25, 2021, which preceded the filing of the main petition.
After Chatterjee had resigned, Sohan Kumar Jha was empowered to contest legal proceedings on behalf of SREI Equipment Finance.
Subsequent to the execution of the second PoA, the NCLT on April 4, 2022, had directed SREI Equipment Finance to obtain proper instructions from the administrator to make necessary amendments to the pleadings in the company petition.
The NCLAT said it was "of the considered view that the institution of the main petition and continuance of the proceedings on behalf of the financial creditor has been done by duly authorised persons at all points of time and therefore the NCLT did not commit any error in finding the main petition to be maintainable and valid."
"We are of the considered view that there are no sufficient and plausible grounds made which warrant any interference with the impugned order. There is no merit in the appeal. The appeal is dismissed," it said.
However, the NCLAT mentioned the delay by the NCLT in passing the order.
The order was reserved by the NCLT on December 5, 2022, and was pronounced on June 26, 2023.
"...procrastinated pronouncement of the order has given fodder to the appellant in making the absurd claims of having not been heard," the appellate tribunal said.
"At this point, we cannot restrain ourselves from observing that such unreasonable and unexplained delays in delivering verdicts are not desirable. Be that as it may, the hyper-technical and opportunistic pleas raised by the appellant to stymie the admission of CIRP of the corporate debtor cannot be countenanced either," it noted.