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Informist, Wednesday, Mar. 19, 2025

 

--NCLAT sets aside order to start IBC proceedings against Essar Oil and Gas 

--CONTEXT: NCLT admitted Greka Green's IBC plea against Essar Oil and Gas 

 

NEW DELHI – The National Company Law Appellate Tribunal on Wednesday set aside an order by the National Company Law Tribunal's Ahmedabad bench to start insolvency proceedings against Essar Oil and Gas Exploration and Production Ltd., an entity of the Essar Group. In September last year, the Ahmedabad tribunal had admitted an insolvency petition by operational creditor Greka Green Solutions (India) Ltd. against Essar Oil and Gas Exploration and Production for an unpaid amount of INR 243.83 million. 

 

The appellate tribunal noted that the entire debt has been discharged by Essar Oil and Gas Exploration and the insolvency case against them was "uncalled for". Sufficient ground has been made out by Pankaj Kalra, the suspended director of Essar Oil and Gas Exploration, to allow the appeal and set aside the Ahmedabad tribunal's order, said the appellate tribunal.

 

Kalra had argued that the parties had entered into a settlement in which the last instalment was supposed to be paid. However, Greka Green filed the insolvency petition, disregarding the settlement between the parties, said the suspended director. The last settlement instalment was also paid by Essar Oil and Gas Exploration before the insolvency petition was admitted, Kalra added.

 

Essar Oil and Gas Exploration has a turnover of INR 8 billion with an employee strength of 425, the suspended director had said in September. The Ahmedabad bench should not have admitted the insolvency petition, he said, adding that the tribunal had noticed the settlement but did not deal with it. 

 

Greka Green Solutions had moved the Ahmedabad bench of the tribunal saying Essar Oil and Gas Exploration had not paid the invoices arising out of the drilling services provided by the operational creditor as per a contract between the parties. A settlement agreement was reached between the parties, which Essar Oil and Gas Exploration had acknowledged but did not pay the amount, Greka Green Solutions had said. Essar Oil and Gas Exploration contested Greka Green Solutions' plea and said the dues payable to the latter did not constitute an operational debt and hence it was not maintainable.  

 

In September, the Ahmedabad bench had appointed Mohit Bipinchandra Adatiya as the interim resolution professional to carry out the functions of the company as per the Insolvency and Bankruptcy Code, 2016. Further, the tribunal had ordered a moratorium against Essar Oil and Gas Exploration in terms of Section 14 of the Insolvency and Bankruptcy Code, 2016. However, in the same month, the appellate tribunal had stayed the Ahmedabad tribunal's order on an appeal by the suspended director.  End

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

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