Case Law Details
Committee of Creditors of Amtek Auto Ltd. Vs Mr. Dinkar T.Venkatasubramanian & Ors. (NCLAT Delhi)
Recently the Delhi bench of National Company Law Appellate Tribunal (NCLAT) has passed an order for liquidation in the case of Amtek Auto Limited. The two-judge Bench headed by Justice S J Mukhopadhya, stated in its order ‘As we have noted that more than 270 days have been completed much earlier and no case is made to exclude any period, we hold that adjudicating authority has no other option but to pass order of liquidation.’
It is pertinent to note that insolvency proceedings against Amtek Auto Limited were initiated by a consortium of banks led by Corporation Bank in 2017. The Chandigarh bench of National Company law Tribunal accepted the application for CIRP 24th July, 2017. Mr Dinkar Tiruvannadapuram Venkatsubramanian was appointed interim resolution professional on 27th July, 2017. All procedures as laid down under the Insolvency and Bankruptcy Code 2016 were carried out by the resolution professional. The Committee of Creditors after detailed scrutiny approved the resolution plan submitted by Liberty House Group Pte Ltd. Amtek Auto Limited has a total debt of Rs.12,603 crore.The adjudicating authority has approved the Rs.4025 crore resolution plan of Liberty House on 24th July,2018.This plan included an upfront payment of Rs. 3225 crore and a fresh infusion of Rs.500 crore for stablising and improving operations.
However Liberty House Group backtracked citing blatant discrepancies in the condition of machineries, valuations and representations made in the information memorandum and valuation reports. The Insolvency and Bankruptcy Board of India (IBBI) filed a complaint against Liberty House in May, 2018. Section 74(3) of the Insolvency and Bankruptcy Code 2016 says that any party that violates conditions laid down under the resolution plan is liable for prosecution and may face a prison term of up to five years with a penalty of up to Rs. 1 crore.
This complaint of IBBI was in accordance with the decision of NCLT, Chandigarh bench of NCLT which had allowed the Committee of Creditors and Resolution Professional to approach IBBI to initiate criminal proceedings against Liberty House.
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