McLeod Russel India Ltd (MRIL), part of the BM Khaitan-controlled Williamson Magor Group, on Wednesday urged the Kolkata Bench of the National Company Law Tribunal (NCLT) not to continue with its interim order of status quo on the sale of the company’s assets.
The counsel appearing on behalf of McLeod said that the status quo order might have “serious repercussion” and “negative ramifications” in the operations of the bulk tea producer.
The Kolkata Bench of NCLT had, on September 3, passed an order of status quo of assets of McLeod as disclosed in the financial statement for the year ended March 31, 2019 till the next date of hearing.
The interim order was passed based on an application filed by Techno Electric expressing apprehension over disposal of assets of the company, which would thereby defeat its interest.
Techno Electric FC
Joy Saha — counsel for McLeod Russel — clarified that each of the assets over which Techno Electric has asked for injunction, are already mortgaged in favour of the banks.
Techno Electric and Engineering Company Ltd had filed a petition for initiating corporate insolvency resolution process against debt-laden McLeod Russel before the tribunal under Section 7 of the IBC claiming that it had defaulted on repayments of ₹100-crore loan. The insolvency case against McLeod is yet to be admitted.
In its interim order on September 3, the two-member Bench comprising Justice Jinan KR and Justice Harish Chander Suri, said: “The documents referred to us add strength to the apprehension on the side of the applicant that if an ad interim order is not passed, there is every chance of removal of the assets of the corporate debtor (MRIL), defeating the very purpose of resolution if any passed in favour of the applicant. It requires larger evidence and hearing so as to answer the objections raised on the side of the respondent/CD. Therefore, the interest of justice demands to pass an order of status quo of the assets as disclosed in the financial statement for the year ending March 31, 2019, till the next day of hearing.”
McLeod, which has a total outstanding debt of over ₹1,700 crore, is banking on acceptance of its restructuring proposal by a consortium of bankers.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.