The Kolkata Bench of the National Company Law Tribunal (NCLT) has directed initiation of corporate insolvency resolution process (CIRP) against Eastern Coalfields Ltd (ECL), a subsidiary of Coal India.

The NCLT admitted the insolvency petition filed by Gulf Oil Lubricants India Ltd against ECL, which allegedly refused to pay the interest on debt outstanding towards goods supplied to the company. ECL had, however, paid the principal sum of around ₹84.71 lakh to the operational creditor, Gulf Oil Lubricants. The interest was payable at the rate of 18 per cent per annum.

“The application filed by the operational creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016, is hereby admitted for initiating CIRP against ECL. The moratorium order is passed for a public announcement as stated in Sec 13 of the IBC,” the NCLT order said.

The Bench, comprising Justice Madan B Gosavi, appointed Chhedi Rajbhar of C Rajbhar & Co as the interim resolution professional (IRP) to ascertain the particulars of the creditors and to convene a meeting of committee of creditors (CoC) to form a resolution plan for the public sector miner.

“Considering the facts and materials on record, I hold that ECL is liable to pay interest to the operational creditor, that has not been paid in spite of demand,” Gosavi said in the order.

Resolution plan

As per the amended provision of the IBC, the IRP would be required to finalise a resolution plan on or before 105 days from the date of admission of the resolution process.

ECL had clocked net sales of around ₹10,626 crore for FY18, posting a net loss of around ₹931 crore.

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