ICICI's plea seeking insolvency proceedings against Era Infrastructure rejected by NCLT

The National Company Law Tribunal (NCLT) has rejected ICICI Bank's plea to initiate insolvency proceedings against Era Infrastructure (India) Ltd on the grounds of "duplicacy" of claims. A two-member bench headed by NCLT President Justice M M Kumar observed that ICICI Bank has already raised similar claims against its parent company Era Infra Engineering, which is currently undergoing resolution process.

The tribunal held that "on account of duplicacy" of the claims, the petition filed by ICICI Bank "can not be entertained". "This is again raised for admission in the present proceeding. Such a course obviously is not permissible in law...," it said.

The tribunal observed that the application filed by ICICI Bank to initiate insolvency proceedings against Era Infrastructure was based on the same sets of facts and documents which the resolution professional (RP) of Era Infra Engineering had earlier rejected. Later, NCLT had on December 6, 2018 directed the RP of Era Infra Engineering to admit the said claims as financial debt of the company.

Era Infra Engineering was in the first list of 12 defaulting companies which was issued by Reserve Bank of India, directing banks to recover debts through the Insolvency and Bankruptcy (IBC) Code. ICICI Bank had given a loan of Rs 240 crore to Era Infrastructure India. For the loan, its parent firm Era Infra Engineering had guaranteed the payments, which were later defaulted on.

Meanwhile, corporate insolvency was initiated against the parent firm Era Infra Engineering by NCLT and its RP had invited claims. ICICI Bank had lodged its claim before the RP placing reliance on securities and contractual comfort provided by Era Infra Engineering towards the entities and group companies related to it.

However, the RP had rejected its claims on September 13, following which ICIC Bank approached the NCLT. The tribunal had admitted ICICI Bank's plea on December 6, 2018 and had directed RP to admit the claims.

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