NCLAT Set Aside Insolvency Proceedings Against McLeod Russel

A two-member NCLAT bench closed the corporate insolvency resolution process initiated by the Kolkata bench of NCLT.

<div class="paragraphs"><p>A gavel (Source: <a href="">Tingey Injury Law Firm</a>/Unsplash)</p></div>
A gavel (Source: Tingey Injury Law Firm/Unsplash)

The National Company Law Appellate Tribunal has set aside the insolvency proceedings against leading bulk tea producer McLeod Russel following a settlement between the promoter and IL&FS Infrastructure Debt Fund.

A supplementary affidavit was filed before NCLAT by the appellant (Aditya Khaitan), whereby an agreement between the parties dated May 5, 2023, was brought on record.

The financial creditors also informed the appellate tribunal that they had already settled the matter with the promoter, Khaitans, and there were no issues between the parties.

Following this, a two-member NCLAT bench closed the corporate insolvency resolution process initiated by the Kolkata bench of the National Company Law Tribunal on Feb. 10, 2023.

"In view the aforesaid, settlement agreement is taken on record, we close CIRP initiated by order dated Feb. 10, 2023. Order dated Feb. 10, 2023 is set aside," said the NCLAT order, which was uploaded on the website on Tuesday evening.

During the proceedings, the financial institution submitted that "in the event of default, liberty be given to revive the appeal."

Moreover, interim resolution professionals also submitted that certain dues have not yet been paid.

On this basis, counsel for the appellant submitted that "considerable amount of expenses has been paid and if any amount is unpaid, that shall be taken care of," the NCLAT order noted.

The NCLAT direction came over the petition filed by Aditya Khaitan, chairman of the company, against the NCLT order.

Earlier this year, on Feb. 22 this year, passing an interim order, NCLAT had stayed the CIRP and directed the interim resolution professional "not take any further steps."

However, it had directed IRP to run McLeod Russel as a going concern, including the day-to-day operations, with the assistance of its suspended board.

NCLT had been directed to initiate CIRP against IL&FS Infrastructure Debt Fund plea over default in payment of Rs 347.4 crore as of Nov. 12, 2019, of which the principal amount is about Rs 252.66 crore.