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The National Company Law Appellate Tribunal (NCLAT) has paved the way for a resolution plan for Nagarjuna Oil Corporation Ltd (NOCL) even as it is under liquidation, and directed the liquidator (V Mahesh) to proceed with Section 230 of the Companies Act, 2013, read in consonance with Insolvency and Bankruptcy Code (I&B), 2016.
The NCLAT was disposing of an appeal from Haldia Petrochemicals Ltd (appellant) giving the liberty to the company to submit a scheme in consonance with I&B Code. This paved the way for reviving the Corporate Debtor (NOCL) even though it has gone into liquidation, said Mahesh referring to the NCLAT order.
Earlier, HPL had gone on an appeal to NCLAT, against the order by the National Company Law Tribunal (NCLT), Chennai in April, questioning the liquidation and the liquidation value.
Citing precedence, the NCLAT passed the order asking the liquidator to find a way out through scheme (of arrangements or compromise with creditors under Section 230 of the Companies Act that is used for amalgamations) as was held in a few cases like Y Shivram Prasad Vs S Dhanpal & Others.
HPL’s plea rejected
The NCLT Bench, Chennai, had dismissed HPL’s application to appoint one of the valuers registered with the Insolvency and Bankruptcy Board of India to value NOCL and submit a report. It also sought a direction to NOCL’s Insolvency Resolution Professional to provide support to the valuers and reconsideration of their resolution plan.
The NCLAT order passed by Justice SJ Mukhopadhaya had noted that the liquidator has taken steps to proceed under Section 230, and in accordance with NCLAT order in T Shivram Prasad’s case.
It was contended by the liquidator’s counsel that the terms and conditions laid down by the liquidator are similar to those imposed for the resolution plan. NCLAT also felt that this is not the stage for determination of these issues, and can be raised later, if HPL had a grievance on the Scheme submitted by them subject to the same being in accordance with the I&B Code.
The State Industries Promotion Corporation of Tamil Nadu — which owns a substantial portion of the land on which Nagarjuna plant is located in Cuddalore — submitted to the NCLAT that it will maintain status quo up to March 31, 2020, as informed to the liquidator to enable revival of Nagarjuna Oil.
This is seen as a significant step in the process of revival of the unit, said Mahesh.
The ₹3,500-crore NOCL project in Cuddalore, Tamil Nadu, was to go onstream in 2012 but various delays escalated the cost by nearly three times before the project came to an abrupt a halt in December 2011 following a cyclone.
A consortium of 14 banks that funded the project were to bring in an additional ₹7,000-crore debt as part of a restructuring plan, which, however, did not materialise.
Insolvency proceedings were initiated against NOCL by an operational creditor.
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