NCLAT Rejects Sivasankaran’s Plea Against NCLT Order On Liquidation Of Siva Industries

Amid the liquidation of Siva Industries, the National Company Law Appellate Tribunal (NCLAT) rejected entrepreneur C Sivasankaran’s plea against the National Company Law Tribunal (NCLT) order on the same.

This Tribunal reaches a resultant resolution that the Adjudicating Authority had appropriately reached the conclusion that the Corporate Debtor was needed to be arranged for liquidation, in wording Section 33(1)(a) of the Code, 2016 and the equivalent requires no impedance. Seen in that viewpoint, the Company Appeal comes up short, said Justice M Venugopal, Member (Judicial) and VP Singh, Member (Technical), NCLAT, in the order on January 28. 

Meanwhile, in September, NCLT ordered the liquidation of Siva Industries and dismissed lenders’ proposal to pull out the company from bankruptcy proceedings. Apart from that, NCLT also rejected the application filed by Siva Industries' Resolution Professional.

The promoters of Siva Industries had proposed to pay Rs 328.21 crore to IDBI Bank-drove consortium of loan specialists as a one-time settlement intended to pull out the organisation from procedures under the IBC at NCLT. 

Siva Industries' debt is about Rs 4,863 crore and the settlement plan added up to a haircut of around 93.5 per cent for banks. Under the deal, which was supported by the moneylenders toward the beginning of April, the promoters would pay just Rs 5 crore upfront and the equilibrium within 180 days of approval.

NCLAT also said that Insolvency and Bankruptcy Code, 2016 is not allowing the ‘Liquidation Of a Corporate Debtor’ in a direct manner. Upon failure of the ‘Corporate Insolvency Resolution Process,' the Code allows liquidation.