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Informist, Friday, Apr. 24, 2026

 

NEW DELHI – The Supreme Court Friday stayed the National Company Law Appellate Tribunal's Feb. 6 order asking lenders of SREI Infrastructure Finance Ltd. and SREI Equipment Finance Ltd. to pay INR 7.62 billion to National Bank for Agriculture and Rural Development. The court issued notice to NABARD on the lenders' plea challenging the appellate tribunal's order.

 

The appellate tribunal had said the committee of creditors of both SREI companies had agreed to pay this amount to NABARD if the government-owned financial institution's claim was upheld. That NABARD was treated as part of the committee of creditors as a secured financial creditor did not negate its claim in any manner, the appellate tribunal had ruled. It pointed out that though the Kolkata bench of the National Company Law Tribunal had noticed the relevant provisions of The National Bank for Agriculture and Rural Development Act, 1981, it had not obeyed its provisions, which in turn had obliged the administrator of the two companies to keep aside third-party assets. This, the appellate tribunal said, was the administrator's statutory obligation.

 

SREI Equipment Finance Ltd. had availed loans amounting to INR 22.13 billion from NABARD from 2017 through 2019. In 2021, the Kolkata bench of the National Company Law Tribunal had admitted insolvency proceedings against the twin SREI companies on a petition by the Reserve Bank of India. The tribunal had clubbed the petition against both companies to ensure a coordinated resolution process for the connected entities. The companies had a total of 43 financial creditors, including State Bank of India, Punjab National Bank, Bank of India, and NABARD. The admitted debt of the companies towards these creditors was INR 327.49 billion.

 

During the insolvency proceedings, NABARD had filed its claim for INR 8.84 billion and sought priority of repayment of the full amount over all other payments and recoveries out of the assets assigned to it by SREI Equipment Finance. 

 

In 2023, the Kolkata tribunal had approved the government-owned National Asset Reconstruction Co. Ltd.'s INR 148.67 billion resolution plan for Srei Infrastructure Finance and Srei Equipment Finance. Under the resolution plan, INR 1.22 billion was credited to NABARD as payment to dissenting financial creditors.

 

However, seeking full payment, NABARD argued that by virtue of statutory entitlement under the 1981 Act, it was entitled to receive the amount in priority. The administrator of the SREI companies said NABARD, having filed its claim and being a secured creditor, has to be treated in accordance with the provisions of the 2016 Code.  End

 

Reported by Surya Tripathi

Edited by Rajeev Pai

 

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