The National Company Law Appellate Tribunal (NCLAT) has taken a significant step in the ongoing legal dispute involving Srei Infrastructure Finance, instructing the Reserve Bank of India (RBI) to provide a response within three weeks to a petition filed by Adisri Commercial. Adisri Commercial, the former promoter of Srei Infrastructure Finance, has contested a previous order issued by the tribunal.
The controversy started when the Kolkata bench of the National Company Law Tribunal (NCLT) admitted Srei Infrastructure Finance into the corporate insolvency process on October 8, 2021. In response, Adisri Commercial challenged this NCLT order in December 2022, only to have their plea dismissed by the NCLAT bench. The initial dismissal was based on the grounds of filing delay, raising concerns about adherence to due process and natural justice.
Senior advocate Ranjit Kumar, representing Adisri Commercial, argued that the dismissal of their initial appeal was hasty and lacked proper evaluation on merits. Kumar emphasized that no notice was given, which he claimed violated the principles of natural justice. Kumar also highlighted that the company’s appeal was promptly dismissed after admission, without adequate consideration.
Kumar stressed that Adisri Commercial does not owe any debt as claimed by the RBI, and the company was not provided an opportunity to present evidence of the absence of debt. He also appealed for leniency due to the impact of the COVID-19 pandemic on the filing process.
Responding to these claims, Gopal Jain, senior counsel for the RBI, asserted that Adisri Commercial had not demonstrated seriousness and commitment throughout the legal proceedings. Jain argued against recalling the dismissed appeal, stating that it would disrupt the Corporate Insolvency Resolution Process (CIRP) and set a dangerous precedent.
The RBI clarified that its action of superseding the boards of Srei Infrastructure Finance and its subsidiary was due to significant defaults and concerns over governance. The RBI refuted the notion that the initial appeal dismissal was solely due to timing issues, citing Adisri's pursuit of the matter across various courts.
The NCLAT bench requested both parties to provide precedents on whether recalling a dismissed appeal is permissible. The case is set to be heard again on September 25.
The dispute centers around Srei Group's lending companies, Srei Equipment and Srei Infrastructure, which owe approximately ₹30,000 crore to creditors. The resolution process includes three applicants: a consortium of Varde Partners and Arena Investors, National Asset Reconstruction Co. (NARCL), and Authum Investment and Infrastructure.
Source: Link
Picture Source :
