NCLAT quashes insolvency proceedings against Bharat Road Network

The NCLAT has set aside insolvency proceedings initiated against Bharat Road Network Ltd, and directed the NCLT-Kolkata bench to close the matter.

A three-member NCLAT bench headed by Chairman Justice S J Mukhopadhaya observed that corporate debtor (Bharat Road Network) has settled its dues with its financial creditor Religare Finvest.

The appellate tribunal also observed that CoC (Committee of Creditors) was not formed and promoters has cleared the amount claimed by the financial creditor.

"Taking into consideration the fact that the CoC has not yet been constituted and the parties have settled the matter, we set-aside the impugned order dated August 28, 2019 and dismiss the application under Section 7 of the I&B Code filed by Religare Finvest," the NCLAT said.

"The Adjudicating Authority (NCLT) will now close the company Petition," it added.

The appellate tribunal also set aside the direction passed by the National Company Law Tribunal (NCLT) to appoint an Interim Resolution Professional (IRP) declaring moratorium against the lenders of the company.

Bharat Road Network is a build operate transfer (BOT) company based in Kolkata. It has a project portfolio consisting of six BOT projects.

The National Company Law Appellate Tribunal (NCLAT) also observed that as the IRP has functioned since about 10 days, hence, it directed the company to pay Rs 1.50 lakh as fees and cost.

Challenging the NCLT order before the NCLAT, Bharat Road Network had submitted that it had requested tribunal to defer the pronouncement of order as it was willing to pay the total debt of Religare Finvest.

However, without giving such opportunity, the NCLT passed the order on August 28, 2019, directing to initiate insolvency and this was challenged before the NCLAT by its Managing Director and Shareholder Bajrang Choudhary.