The National Company Law Tribunal (NCLT) has reserved its order in Era Infrastructure's insolvency case
over jurisdictional issues. Lawyers associated with the case say that the NCLT
will take a call on whether the matter has to be transferred to the high court as there are a number of winding-up petitions against the corporate debtor.
Amid pending winding-up petitions already filed in the Delhi High Court
against the company, the NCLT's New Delhi Bench was hearing a case filed by the Union Bank
seeking the commencement of the insolvency resolution process against Era Infra under Section 7 of the Insolvency and Bankruptcy
The Bench had earlier questioned Union Bank
as to whether the insolvency application against Era Infra could be entertained in light of the pending high court petitions since the tribunal is required to pass an order staying all other legal proceedings before the insolvency process can commence.
Article 227 of the Constitution says that the high court of a state shall have supervisory jurisdiction over all courts and tribunals within its area of influence.
However, the counsel for Union Bank
had argued that the insolvency case
against the company could be admitted as all creditors involved in the winding-up petitions could stake their claims over the company's assets if the case came up under IBC.
The bank had also highlighted orders from other benches of the NCLT, according to which, insolvency proceedings could be initiated in similar circumstances.
Era Infra's lawyers also highlighted that the tribunal was entitled to entertain the matter and contended that the rules issued under the Companies
Act 2013 to transfer pending winding-up petitions did not come in the way of insolvency proceedings initiated under the IBC.
In support of this statement, Era Infra also highlighted the intention of the Code to amalgamate all company and insolvency matters into one forum for adjudication.
The liability claimed by Union Bank
is Rs 681.04 crore, along with an overdue external commercial borrowing of $11.97 million, as on May 31, 2017. Era had contested the amount, which will be decided by insolvency professionals.
Era Infra Engineering owes over Rs 10,000 crore to its creditors. Over and above this, there are statutory dues, some of which are under litigation.
Era is one of the 12 bad loan accounts that have been directed by the Reserve Bank of India to be referred to the NCLT