The National Company Law Appellate Tribunal (NCLAT) on Tuesday stayed the insolvency process against Essar Oil and Gas Exploration and Production Ltd.
The appellate tribunal stayed the National Company Law Tribunal (NCLT) Ahmedabad's order admitting an insolvency plea filed by Greka Green Solutions (India) Ltd for more than Rs 24 crore against Essar Oil. This was on the appeal filed by Pankaj Kalra, the suspended director of Essar Oil.
The appellate tribunal also issued a notice to Greka Green Solutions informing them of the stay and scheduled the next date of hearing for November 6.
Essar Oil said it had made the final payment prior to the insolvency petition's admission. It said it reported a turnover of Rs 800 crore and had 425 employees.
Essar Oil's counsel said the NCLT had overlooked the settlement agreement between the parties while admitting the insolvency petition and that Essar Oil had paid the last instalment of the settlement before the insolvency proceedings.
The earlier NCLT order had admitted the insolvency case, saying the conditions under Section 9 of the Insolvency and Bankruptcy Code were met.
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Section 9 of the Insolvency and Bankruptcy Code (IBC) allows operational creditors to start a corporate insolvency resolution process by filing an application with the Adjudicating Authority (that is, NCLT).
Essar Oil, however, said that since the dispute had been resolved through the settlement, the insolvency application should not have been admitted.