NCLAT halts liquidation process of Sterling Biotech till further orders

The National Company Law Appellate Tribunal (NCLAT) has stayed the liquidation process of debt-ridden Sterling Biotech till further orders.

A two-member NCLAT bench headed by Chairman Justice S J Mukhopadhaya stayed the operation of May 8, 2019 order of the Mumbai bench of National Company Law Tribunal (NCLT) directing liquidation of the company.

"Until further order, the operation of impugned order dated May 8, 2019 so far as liquidation is concerned shall remain stayed. However, the Liquidator will ensure that the company remains a going concern," the bench said.

"The bank accounts of the Corporate Debtor' (Sterling Biotech) be allowed to be operated for day-to-day functioning of the company such as for payment of current bills of the suppliers, salaries and wages of the employees/workmen, electricity bills etc," it added.

NCLAT also directed listing of two matters on July 16 "for admission". One plea is filed by Andhra Bank, which is leading the consortium of lenders to Sterling Biotech and another filed by Shweta Vishwanath Shirke and others against the Committee of Creditors (CoC) of the debt-ridden firm.

NCLAT has issued notices to the CoC and resolution professional of the company directing them to file their replies in next two weeks.

Sterling Biotech, whose promoters Nitin Jayantilal Sandesara and Chetankumar Jayantilal Sandesara are absconding, has a total debt of over Rs 9,000 crore.

NCLT on May 8 while rejecting Sterling's plea filed under section 12A of the Insolvency & Bankruptcy Code (IBC) said "since no resolution plan has been approved within the statutory period of 270 days, therefore we are passing the order of liquidation of the company."