You are here: Home » Companies » News
Business Standard

NCLT directs Era Infra to accept ICICI Bank as financial creditor under IBC

A two-member principal bench of the NCLT also directed the RP to grant ICICI Bank a proportional voting share in the Committee of Creditors

Era Infrastructure  |  Nclt  |  Icici Bank

Press Trust of India  |  New Delhi 

NCLT, Rules, Regulations
Photo: Shutterstock

The (NCLT) on Thursday directed the resolution professional of India to admit as a financial creditor under the insolvency proceedings.

The resolution professional (RP) had declined to accept ICICI Bank's claims worth Rs 7 billion.

A two-member principal bench of the also directed the RP to grant a proportional voting share in the Committee of Creditors (CoC).

"The corporate debtor is liable to repay the amount granted by the to Era Infra and Dehradun Highway Project as a Financial debt as per the provisions of the code," said the bench headed by President Justice M M Kumar.

had started insolvency proceedings against in May 2018 and appointed an RP for the company.

The RP had denied the claims of ICICI Bank.

"As a consequential relief, a direction is issued to RP to revise the list of financial creditors of the corporate debtor by including the claims of ICICI Bank with respect to the failities granted to and Dehradun Highways Project Ltd amounting to Rs 7 billion and credit the applicant ICICI Bank in the CoC by adding the aforesaid claims," the order said.

It further added: "It shall also grant the applicant its voting share in the CoC in proportion to such claims with all consequential benefits arising therefrom."

ICICI Bank had given a loan of Rs 2.4 billion to Era Infrastructure India and Rs 4.6 billion to Dehradun Highway Projects and was liable to get a repayment from the corporate debtor, according to the terms of the agreement between the parties.

The RP of Era Infrastructure had, however, denied this claim saying that agreement could not be construed as akin to guarantee of repayment.

The NCLT, however, rejected the RP's arguments, saying that once the corporate debtor had undertaken such obligations, the claims against the same could not be denied to the lender.

"Once it is an amount repayable, then the Resolution Professional must admit the claims of the ICICI Bank as financial debt, in respect of the obligations undertaken by the corporate debtor under the credit facilities availed by Era Infrastructure India Ltd and Dehradun Highway Project," NCLT said.

Era Infra was in the first list of 12 defaulting which was issued by Reserve Bank of India, directing banks to recover debts through the Insolvency and Bankruptcy (IBC) Code.

It had an overdue external commercial borrowing of $1.97 million, as on May 31, 2017.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, December 06 2018. 21:40 IST