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Ramsarup Industries admitted under IBC despite ICICI Bank objections


Financial Express reported that the Kolkata bench of the National Company Law Tribunal (NCLT) has admitted a petition filed by steelmaker Ramsarup Industries for initiating the corporate resolution process, even as India’s largest private-sector lender ICICI Bank had opposed the insolvency petition of the company. This is probably the first instance of a major bank opposing a defaulter’s appeal to initiate insolvency proceedings under the Insolvency and Bankruptcy Code (IBC).

Admitting the company’s petition for commencing corporate resolution process by an order dated January 8, a division bench of the tribunal comprising justices Vijai Pratap Singh and Jinan KR said “It is undisputed that the corporate debtor is not ineligible under Section 10 of the IBC to file application under Section 10 of the Code… Every ingredient of Section 10 is complete, and all the information is provided by an applicant as required under Section 10 in Form VI. The corporate applicant is otherwise not ineligible under Section 11. Thus application filed under section 10 deserves to be admitted.”

Ramsarup Industries owes financial creditors INR 3,379.77 crore, of which ICICI Bank’s exposure is a relatively small INR 36.03 crore. It had filed an insolvency application under Section 10 of the IBC on the basis of its board resolution dated May 5, 2017. However, ICICI Bank alleged that the application had been filed with ‘malicious intent’ for purposes other than for insolvency resolution.

Apart from ICICI Bank, other lenders to the company include State Bank of India, Punjab National Bank, IDBI Bank, Axis Bank, Bank of India, Vijaya Bank, Canara Bank, Allahabad Bank, United Bank of India and SREI Equipment Finance. Axis Bank and Arcil had separately filed applications before the tribunal under Section 7 of the IBC for initiating corporate insolvency resolution process against Ramsarup Industries. Issuing an order on January 8, the tribunal dismissed both the petitions on the ground that no second application against the same corporate debtor was ‘maintainable’ as the company’s insolvency plea under Section 10 had already been allowed.

Source : Financial Express