NCLT adjourns insolvency case against Reliance Naval by IFCI to Jan 18

IFCI had filed separate petitions in mid-November in NCLT under section 7 of the Insolvency and Bankruptcy Code 2016 against defaulter Reliance Marine and Offshore Ltd

The Ahmedabad bench of National Company Law Tribunal (NCLT) on Tuesday adjourned an insolvency case against Anil Ambani-led Reliance Naval and Engineering Ltd. to January 18, 2018.

The case had been earlier adjourned on grounds of Reliance Naval and Engineering Ltd. seeking time to approach the apex National Company Law Appellate Tribunal (NCLAT). However, with a NCLAT hearing yet to happen, the ongoing case at the Ahmedabad bench of NCLT was adjourned till January 18.

Reliance Marine & Offshore Ltd., a subsidiary of Reliance Naval and Engineering Ltd. and its guarantor, failed to serve a Rs 600 million loan extended by IFCI, following which the lender approached the NCLT against both in mid November.

IFCI had filed separate petitions in mid-November in NCLT under section 7 of the Insolvency and Bankruptcy Code (IBC) 2016 against defaulter Reliance Marine and Offshore Ltd. and its guarantor Reliance Naval and Engineering Ltd. According to sources, IFCI seeks to in all recover dues worth over Rs 150 crore.

Earlier, in an official statement, Reliance Naval stated: "As legally advised, there are no merits in the application filed by IFCI before NCLT, Ahmedabad, as its an unsecured creditor. The action of IFCI is unwarranted and premature. The 25 secured lenders of the Company have also requested IFCI that the matter be resolved outside NCLT. The company will take all necessary steps to safeguard the interest of all the stakeholders."

In December 2017, Reliance Naval and Engineering had also filed an interim application with the NCLT seeking the ongoing hearing to be put in abeyance. Under the application, the company had cited an ongoing case in the Gujarat High Court where a defaulter company Shivam Water Treaters has challenged the constitutional validity of section 7 of the IBC 2016 which pertains to insolvency and winding up process under the new law.

However, the NCLT's Ahmedabad bench had dismissed the application while stating that the case did not apply to Reliance Naval and Engineering Ltd.

It needs to be mentioned here that on November 27, the NCLT had asked Reliance Naval to file objections to the insolvency plea which came up for hearing on December 8.