The National Company Law Tribunal (NCLT) has recommended the insolvency petition against Era Infrastructure to the president of the NCLT so that a call can be taken regarding the transfer of the case to a larger bench.
In an order, a two-member NCLT bench stated that the president of the tribunal can take a call on the case.
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.
The bench had earlier questioned the 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 the Insolvency and Bankruptcy Code 2016 (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 IBC Code to amalgamate all company and insolvency matters into one forum for adjudication.
The liability claimed by Union Bank until March-end is to the tune of Rs 681.04 crore, along with an overdue external commercial borrowing of $11.97 million. Era Infra had contested the amount but a final decision on the matter will be taken 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.