NCLAT rescinds liquidation order for Ballarpur Industries Limited

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the National Company Law Appeal Tribunal (“NCLAT”) Main bench composed of Judge Ashok Bhushan (president) and Ms Shreesha Merla (technical member), while ruling on an appeal filed in Finquest Financial Solutions Pvt. Ltd v Anuj Jain (Erstwhile RP of Ballarpur Industries Ltd.) & Ors., possesses put aside the order dated 25.01.2022 adopted by NCLT Mumbai Bench (“Arbitration Authority”) by which Ballarpur Industries Ltd. was sent for liquidation. Now, the NCLAT Bench has extended the period of the Corporate Insolvency Resolution Process (“CIRP”) to 30.04.2022 and ordered the resolution professional to have the revised resolution plan approved by the contracting authority. The order was placed on 19.04.2022.

Background Facts

The contracting authority had initiated the CIRP against Ballarpur Industries Ltd. (“Debtor Company”) to see a decree of 17.01.2020 passed in M/s Finquest Financial Solutions Pvt. ltd. against Ballarpur Industries Ltd., CP (IB)-2915/I&B/MB/2019. Subsequently, a provisional application with the number IA 2510 of 2021 was lodged with the contracting authority for the liquidation of Ballarpur Industries Ltd. (“Corporate debtor”) and the liquidation order was issued on 25.01.2022.

An appeal has been filed by Finquest Financial Solutions Pvt. ltd. (“Requester/Appellant”) before the NCLAT against the order of 25.01.2022. The Appellant had argued that the order dated 25.01.2022 had been uploaded on 22.02.2022 and that in the meantime a revised Resolution Plan had been submitted by the Appellant on 07.02.2022, which was reviewed by the Creditors’ Committee (“CoC”) in its meeting of 11.02.2022. Consequently, the resolution professional had filed an AI no. 402/2022 with the contracting authority for reconsideration of the resolution plan.

On 07.03.2022, the NCLAT suspended the liquidation order dated 01.25.2022 and ordered the CoC to review the revised resolution plan within six weeks. Subsequently, AI no. 402/2022 was rejected by the judicial authority to see an order dated 21.02.2022, noting that the request had become unsuccessful because the liquidation order had already been pronounced.

The resolution professional had filed an affidavit with the NCLAT stating that on 04.14.2022, the CoC had approved the revised resolution plan with an 88% majority, after reviewing its feasibility and viability.

NCLAT Decision

The NCLAT Bench, having read the said affidavit, rescinded the order dated 01.25.2022. In addition, the resolution professional has been authorized to file a request with the contracting authority for the approval of the revised resolution plan and to take all other consequent measures. As a result, the CIRP period has been extended until 30.04.2022.

Case title: Finquest Financial Solutions Pvt. ltd. v Anuj Jain (Erstwhile RP of Ballarpur Industries Ltd.) & Ors., Company Appeal (AT) (Insolvency) No. 227 of 2022.

Counsel for the Appellant: Senior Attorney Ramji Srinivasan, Adv. NPS Chawla, Adv. Surekh Kant Buxy, Adv. Kinjal Goyal and Adv. Sujoy Datta.

Counsel for Respondents: Adv. Ankur Mittal, Adv. Aishwarya Pandey, Adv. Itisha Gulati, Adv. Meera Murali, Adv. Ramakant Rai, Adv. Yashish Chandra and Adv. Somesh Srivastava, Adv. Shreya Sircar and Adv. Sanjukta Roy.

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