SC upholds order to NCLT to hear afresh Canara Bk IBC plea vs GTL Infra, arm
This story was originally published at 20:41 IST on 25 November 2024
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NEW DELHI – The Supreme Court on Monday upheld an order of the National Company Law Appellate Tribunal asking the Mumbai bench of the National Company Law Tribunal to hear Canara Bank's insolvency petitions against GTL Infrastructure Ltd. and its associate company GTL Ltd.
The bank, as part of a consortium of financial institutions, had given substantial credit facilities to both companies, which subsequently defaulted on the repayments. Canara Bank then moved the Mumbai bench to start insolvency proceedings against the companies.
In 2022, the Mumbai bench dismissed the bank's petition saying both companies were financially viable and had enough cash flow to repay their debts. The tribunal said GTL Infrastructure had repaid INR 169.15 billion to its lenders between 2011 and 2018, which showed the company was reasonably healthy and could pay back its debts.
While rejecting the insolvency proceedings against GTL, the tribunal said more than 91% of its lenders by voting share had agreed to invoke the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest route to recover their loans and approved a one-time settlement. Since GTL's debt was restructured, it had repaid an additional INR 27.00 billion to lenders against its bank loans of INR 33.00 billion, the tribunal said.
The bank challenged this order before the appellate tribunal. In October, the appellate tribunal set aside the Mumbai bench's order and remanded the case back to it for a fresh look.
On Monday, shares of GTL Infrastructure Ltd. ended 0.5% lower at INR 2.01 rupees on the National Stock Exchange, while the shares of Canara Bank ended 4.1% higher at INR 100.98. End
Reported by Surya Tripathi
Edited by Rajeev Pai
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