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In another case of a defaulting resolution applicant, the Chennai Bench of the NCLT has passed an order allowing an extra period of 90 days to the Resolution Professional (RP) for attracting more buyers.
Ingen Capital Group was the successful resolution applicant for corporate debtor, Orchid Pharmaceuticals Limited. As per approved resolution plan, Ingen was required to deposit a sum of Rs. 1,000 crore within five days of approval of the Resolution Plan by NCLT; Rs. 1,000 crores being the approved sum due to secured financial creditors. The NCLT approved the plan on September 17, 2018. However, Ingen did not deposit the promised sum. The Creditors’ Committee had also granted a waiver from depositing earnest money of Rs. 5 crore, and a performance guarantee of Rs. 50 crore, to Ingen.
The Creditors and RP of Orchid Pharma then approached the NCLT seeking directions against Ingen. The NCLT passed an order directing Ingen to deposit one-third of the promised sum (Rs. 1,000 crore) within 5 days of its order. The said order was passed on October 10, 2018. Despite the direction, Ingen did not deposit any amount.
Between the time Ingen’s resolution plan was accepted by the Creditors’ Committee till the time it received NCLT’s approval, Ingen sought for extra information from the RP. However, these talks concluded. After the approval by the NCLT as well, Ingen raised the issue of incomplete information. It was Ingen’s claim before the NCLT that since the RP denied them access to information in respect of debt towards J.M Financial, it was unable to raise funds and close the transaction.
The NCLT in its order has recorded strong disapproval over the conduct of the Ingen. The NCLT noted that the resolution plan did not provide for any caveat stating that the implementation is dependant upon supply of further information to Ingen by the RP.
While the case was pending before the NCLT, an appeal was filed with the NCLAT. The NCLAT passed an order directing the NCLT to pass appropriate orders with respect to the insolvency resolution process i.e. if further plans need to be considered. Based on the aforesaid order, the NCLT has allowed a 90-day extension period to the RP and Creditors’ Committee to call for fresh resolution plans. Furthermore, the NCLT has excluded the time between invitation of ‘expression of interest’ till the time the resolution plan was submitted with the NCLT.
The NCLAT, meanwhile, is conducting proceedings to take action against the defaulting resolution applicant, Ingen.
The RP was represented by Senior Advocate Sathish Parasaran briefed by Edward James of Cyril Amarchand Mangaldas before the NCLT.
(Read the order)