The bankruptcy court in Ahmedabad has admitted Essar Group entity Essar Oil and Gas Exploration & Production Ltd under the Corporate Insolvency Resolution Process (CIRP).
The National Company Law Tribunal (NCLT) has admitted the company in an application filed by the company’s operational creditor Greka Green Solutions (India) Ltd, after the Essar Group entity defaulted on its dues of about Rs 24.38 crore.
The tribunal has also appointed Mohit B. Adatiya, director of NPV Insolvency Professionals Private Limited (NPV IPE) as the Interim Resolution Professional (IRP) for the company.
“As the operational creditor has proved that there is a debt and despite the service of notice under Section 8, same was not paid by the respondent (Essar Oil and Gas Exploration & Production),” said a division bench of judicial member Chitra Hankare and a technical member V.G. Venkata Chalapathy in its order.
“Accordingly the application filed under Section 9 of the Insolvency & Bankruptcy Code (IBC) for initiation of insolvency resolution process against the respondent deserves to be admitted,” said the tribunal in its order of September 6.
Before the tribunal’s order, Vishal Raval, counsel for Greka Green Solutions argued that it had agreed with Essar Oil and Gas Exploration & Production to provide certain turned-key services by contract to enable the Essar Group entity to undertake a contract with the Government of India.
The operational creditor also argued through its advocate that both parties reached to a settlement agreement twice.
However, countering this, Essar Oil and Gas Exploration & Production, through its counsel denied the debt due and payable under Section 9 of the IBC as it was not an operational debt and hence not maintainable.
“The settlement agreement did not provide for any claim of interest on the principal amount due and payable and an unimaginable claim of $1.73 million has been made towards the interest as it ignores the settlement agreement which was unilaterally terminated by the applicant and hence, the application is barred by the limitation,” argued the Essar Group entity through its counsel.
However, admitting the company under the resolution process, the tribunal observed that there is no dispute on the contract executed, and the applicant has been waiting for a long time to realise his amount, compromised and rescheduled his debt and hence deserves to proceed against the respondent (Essar Oil and Gas Exploration).
