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The Hyderabad Bench of the National Company Law Tribunal (NCLT) has given its nod for Corporate Insolvency Resolution Proceedings (CIRP) to be initiated against Ramky Infrastructure Ltd. The company is publicly listed and has a paid-up share capital of over Rs. 57 crores.
Judicial Member Bikki Raveendra Babu passed orders after hearing a petition filed by one of Ramky’s operational creditors, Todi Minerals Pvt Ltd.
The petitioner claimed that it had entered into an agreement with the Corporate Debtor (Ramky) in 2012, according to which Ramky would be allowed to use their plant and equipment for an initial consideration of about Rs 35 lakh, which was to be considered a deposit. A further sum of over Rs 50 lakh was to be paid at a later stage.
A month later, the creditors sought the balance due as per the agreement. The two later signed a Memorandum of Understanding (MoU) in 2014, wherein it was agreed that the outstanding sum would be reduced and a full and final settlement would be reached.
Soon after, the petitioner wrote to Ramky seeking a payment of about Rs 26 lakh, which was to be the first installment as per the MoU. Ramky, however, paid only Rs 10 lakh.
A legal notice was issued, which went unanswered. Statutory notice as required under the Companies Act was then served, but no payment was made. The outstanding amount due at that point along with interest stood at nearly Rs 70 lakh, by the end of 2014.
Todi Minerals then filed a winding-up petition before the Hyderabad High Court in October 2015. In January 2017, the High Court permitted the creditor to approach the NCLT and file an appropriate petition before the body.
The petitioners then went on to issue notices as per the law demanding a repayment of outstanding dues in December 2017. The petition to initiate CIRP was then preferred.
Avinash Desai, who represented Ramky, opposed the petition on two grounds; that the period of limitation as set out under the Insolvency and Bankruptcy Code (IBC) had expired, and that the executant of the MoU on Ramky’s behalf was unauthorised, according to their Articles of Association.
The Bench ultimately disagreed on both points.
On the point of the unauthorized signatory, the Bench held that the dispute was only raised in response to notices under the IBC, issued by the petitioners demanding payment in December 2017. The Bench held that this was a feeble assertion of fact unsupported by evidence.
The Bench held that provisions of limitation were not applicable in this case, as the High Court had granted express permission to the petitioner to approach the NCLT.
Given that fact, and considering the Companies (Transfer of Pending Proceedings) Rules, 2016, the petitioners had every right to institute fresh proceedings against the corporate debtor, the NCLT Bench ruled.
Update: A highly placed official from Ramky’s top management told Bar & Bench that the company had approached the High Court on July 17, 2018 and that the order had been suspended.
He confirmed that this information had been shared with the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) as required by law. Further details are awaited.
Read the NCLT order:
Read the notice to the exchanges: