Era Infra Engineering on Tuesday argued that all winding up petitions against the company being heard in courts under the Companies Act be clubbed under the Insolvency and Bankruptcy Code (IBC) in the National Company Law Tribunal (NCLT).
A New Delhi Bench of NCLT was hearing a case filed by Union Bank seeking the commencement of the insolvency resolution process against Era Infra under Section 7 of IBC, amid pending winding-up petitions already filed in Delhi High Court against the company.
The Bench had earlier questioned Union Bank whether the insolvency application against Era Infra could be entertained in light of the pending high court petitions, as the tribunal is required to pass an order staying all other legal proceedings before the insolvency process can commence.
Article 227 of the Constitution says the high court of a state shall have supervisory jurisdiction over all courts and tribunals within its area of influence.
However, the counsel for Union Bank has argued that the insolvency case against the company could be admitted as all creditors which are part of winding up petitions can stake claim on the company's assets if the case comes up under IBC.
The bank also highlighted orders of other benches of the NCLT, according to which inslovency proceedings could be intitated in similar cicumstances.
Lawyers for Era Infra also highlighted that the tribunal was entitled to entertain the matter and contended that the rules issued under the Companies Act 2013 to transfer pending winding up petitions did not come in the way of insolvency proceedings initiated under the IBC Code. In support of this statement, Era Infra also highlighted the intention of the Code to amalgamate all company and insolvency matters to one forum for adjudication.
The liability claimed by Union Bank is Rs 681.04 crore, along with an overdue external commercial borrowing of $11.97 million as on May 31, 2017. Era has contested the amount and it will be decided by the insolvency professionals.
Era Infra Engineering owes over Rs 10,000 crore to its creditors. Over and above this, there are statutory dues, some of which are under litigation.
Era is one of the 12 bad loan accounts that have been directed by the RBI to be referred to the NCLT under IBC by banks.
NCLT reserved the order.