Mail News Service
Jamshedpur, July 2: The National Company Law Tribunal (NCLT) in Kolkata conducted a hearing on the INCAB company case, revealing a complex web of financial claims, legal interpretations, and competing interests. The case, which has been ongoing for several months, saw representations from various parties, including financial creditors, the resolution professional, and the proposed investor, Vedanta.
The bench, comprising members Arvind Devanathan and Bidisa Banerjee, had been hearing arguments from the so-called financial creditors for the past two to three months. Senior advocates from both the Kolkata High Court and the Supreme Court represented various parties, including Kamala Mills Limited, Fasqua Investment Private Limited, Pegasus Asset Reconstruction, and Tropical Ventures. Notably, Abhishek Manu Singhvi, a senior Supreme Court advocate, represented Vedanta, the resolution applicant.
During the proceedings, it emerged that the advocates for the financial creditors had not provided specific dates of default for their claimed liabilities, a point that would later be critically addressed by the workers’ representative. The resolution professional’s advocate was also accused of potentially misleading the NCLT regarding the investigation into these financial claims.
Vedanta’s counsel, Abhishek Manu Singhvi, presented their case, emphasizing a proposed investment of Rs 545 crore in INCAB. Singhvi argued that this was a substantial offer, especially considering that INCAB’s Jamshedpur unit had been closed for 24 years and the Pune unit for 8 years. He urged the NCLT to accept Vedanta’s resolution plan, stating that no other comparable offers were on the table.
However, the proceedings took an unexpected turn when Akhilesh Srivastava, the advocate representing INCAB workers, was given an opportunity to cross-examine. Srivastava raised several critical points that challenged the very foundation of the ongoing proceedings. He pointed out that none of the previous advocates had disclosed the default dates of the creditors’ claims, a crucial detail given that Section 238A of the Insolvency and Bankruptcy Act stipulates a three-year limitation period for such claims.
Srivastava further elaborated on the company’s history, noting that INCAB had been closed from 1993 to 1996. He argued that any unpaid bank loans during this period would have become non-performing assets (NPAs) after 90 days of non-payment. If banks failed to initiate recovery proceedings within three years of NPA classification, these loans would become legally unrecoverable. This argument potentially invalidated a significant portion of the financial claims being considered by the NCLT.
The workers’ advocate also highlighted a discrepancy between the current claims and a previous Delhi High Court order. While the current proceedings involved claims exceeding Rs 4000 crore, Srivastava pointed out that a Delhi High Court order from January 6, 2016, subsequently upheld by the Supreme Court, had fixed INCAB’s total financial liability at Rs 21.63 crore.
Questions were also raised about the role and effectiveness of the Resolution Professional, Pankaj Tibrewal. Srivastava alleged that Tibrewal had not adequately investigated or recovered funds from Ramesh Ghamandiram Gowani of Kamala Mills, who had allegedly usurped Rs 500 crore of INCAB’s assets. He also pointed out that significant assets of the company in various locations were in possession of outsiders, questioning the Resolution Professional’s actions over the past three years.
In light of these arguments, the NCLT bench decided to hear the workers’ case separately, with the date for this hearing to be announced later. This decision underscores the complexity of the case and the importance of considering all stakeholders’ perspectives, particularly those of the workers who have been significantly impacted by the company’s long-standing issues.
The INCAB case highlights the intricate challenges in corporate insolvency proceedings, where historical financial claims, asset ownership disputes, and the interests of various stakeholders intersect. As the case progresses, it will be crucial to address the points raised by the workers’ advocate, potentially leading to a re-evaluation of the financial claims and the proposed resolution plan. The outcome of this case could have significant implications for INCAB’s future, its workers, and the broader landscape of corporate insolvency resolution in India.
