NCLAT stops Greka insolvency against Essar
The Delhi-based National Company Law Appellate Tribunal (NCLAT) early this month (September) stopped insolvency proceedings initiated by Greka Green Solutions (India) against Essar Oil and Gas Exploration & Production (EOGPL).
Justices Ashok Bhushan, Barun Mitra and Arun Baroka, in their September 10 (2024) two-page order, suspended the September 6 (2024) order of the Ahmedabad branch of the National Company Law Tribunal (NCLT) initiating insolvency proceedings against EOGPL over unpaid dues to Greka for providing drilling services at EOGPL's Ranignaj East CBM block under a December 2015 contract. In their order Justices Bhushan, Mitra and Baroka noted that EOGPL, in its appeal against the NCLT order, has pointed out that a settlement was entered into with Greka on July 3, 2020.
Under this settlement EOGPL was to pay dues to Greka in 21 instalments from August 2020 to March 2022. EOGPL said 20 instalments were paid and the last instalment "could not be paid and all payments were accepted by the Operational Creditor (Greka)".
Despite this, said EOGPL, an application under Section 9 (of the Insolvency and Bankruptcy Code, 2016 - IBC) was filed by Greka claiming payments "disregarding the settlement". Further, said EOGPL, the last instalment was also paid during the pendency of the proceedings before the Adjudicating Authority (NCLT)."
Nevertheless, the NCLT admitted Greka's Section 9 application under the IBC initiating insolvency proceedings against EOGPL. Justices Bhushan, Mitra and Baroka's order says EOGPL is a "healthy company which has (a) turnover of Rs800cr ($100m) and about 425 employees are working."
Greka has been given three weeks to file a reply after which EOGPL has another two weeks to submit a "rejoinder". NCLAT will next hear EOGPL's appeal on November 6 (2024).
On September 6 (2024), judges Chitra Hankare and VG Venkata Chalapathy at the NCLT's Ahmedabad branch had appointed Mohit Bipinchand Adatiya as the Interim Resolution Professional (IRP) for EOGPL's insolvency process under IBC, following Greka's claim of Rs24.38cr ($3m). Greka began insolvency proceedings against EOGPL over Rs24.38cr ($3m), which it claims for a December 2015 drilling contract at Essar's Raniganj East CBM block.
An Essar spokesman said EOGPL is a profitable company with revenues of Rs870cr ($108m) and an operating profit of Rs625cr ($78m). "The suspension (of the insolvency process) will help maintain our focus on our core operations and ensure that our business activities continue without disruption."