NCLAT stays Vedanta's Resolution Plan for Videocon Industries on plea by Bank of Maharashtra, IFCI [READ ORDER]

The National Company Law Appellate Tribunal (NCLAT) has stayed the Vedanta Group's bid under the Insolvency and Bankruptcy Code (IBC) for Videocon Industries Ltd (Bank of Maharashtra v. Videocon Industries Ltd. & Ors.).

. The move came as a relief for appellants, Bank of Maharashtra (BoM) and IFCI Ltd, which had approached the NCLAT against the approval given by National Company Law Tribunal (NCLT) Mumbai to the resolution plan (RP) submitted by Vedanta's Twinstar Technologies Ltd.

. BoM, a dissenting Financial Creditor submitted that it could not have been paid less than the liquidation value.

It further stated that as per the RP, the payments were directed to be made in Non-convertible Debentures. However, by allowing part payment in cash, the NCLT had permitted change in the resolution plan without sending it back to the Committee of Creditors (CoC).

. IFCI supported the contentions of BoM. It added that the RP provided for a meagre amount of Rs. 2900 crores for admitting liability of Rs. 65,000 crores.

"The waiver itself was Rs. 62100 crores whereby public money has been lost and the financial creditor have been settled for merely 5-10%," it was contended.

. Considering the observations in the NCLT order, and the submissions of the appellants, Justice AIS Cheema , the officiating chairperson and Dr. Alok Srivastava , technical member stayed the NCLT order till the next date of hearing and status quo as before was directed to be maintained.

. NCLT had initiated the Corporate Insolvency Resolution Process against the 13 group entities of Videocon on a plea filed by State Bank of India on behalf of the lenders.

From the 11 resolution plans received from various applicants, the Resolution Plan by Twinstar Technologies was approved by the CoC with a vote of 95.09%.

. Aggrieved by the Resolution Plan and by the treatment meted out to the dissenting financial creditors, the appellants challenged the order.

. Twinstar Technologies Ltd., the Successful Resolution Applicant (SRA) supported the order pointing out that the RP itself had provisions that the payments would be in compliance with Section 30(2)(b) of the Insolvency and Bankruptcy Code (IBC).

"Although the NCDs were stated in the Resolution Plan, as directed by the Adjudicating Authority the payment can be by way of cash," the SRA submitted.

. The NCLAT while issuing notice in the appeals, listed the matter for admission on September 7, 2021.

. Senior Advocates Ranjit Kumar and Garima Prashad with Advocates Chaitanya Nikte, Ayush Negi, Prasad Sarvankar, Sumedh Ruikar, Sneha Bhange, Rajiv K Virmani, Abhinav Agarwal, Anuj Malhotra, Karan Valecha, Sanjay Vashistha represented BoM.

Senior Advocate Krishnendu Datta with Advocates Tanuj Sud, Rajeev Aggarwal, Ajay Kumar, Harshita Alhuwalia and Parth Bhatia appeared for IFCI.

Senior Advocate Abhinav Vashisht with Advocates Anoop Rawat, Saurav Panda, Vajiayant Palilwal, Zeeshan Khan, Moulshree Shukla, Prabh Simran Kaur represented Videocon.

. [Read order]

NCLAT stays Vedanta's Resolution Plan for Videocon Industries on plea by Bank of Maharashtra, IFCI [READ ORDER]

Neha Joshi

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