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NCLAT Dismisses IFCI Plea against ACCIL Hospitality

Steel News - Published on Fri, 21 Feb 2020

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National Company Law Appellate Tribunal has dismissed the insolvency plea filed by IFCI against ACCIL Hospitality, a corporate guarantor of debt-ridden steel products maker Asian Colour Coated Ispat. A two-member bench headed by Chairperson Justice S J Mukhopadhaya observed that “Once the Financial Creditor’s claim has been collated and admitted by the IRP in its entirety, invoking of jurisdiction of the Adjudicating Authority at its instance for triggering a fresh Corporate Insolvency Resolution Process against the Corporate Guarantor would amount to duplicity of claims being pressed. This being a second application for same set of claim and arising out of the same default cannot be admitted against the Corporate Guarantor’ while CIRP initiated against the Principal Borrower’ is still subsisting. The fact that the Resolution Plan is yet to be approved by the NCLT and the Financial Creditor may be faced with the prospect of taking a haircut is no ground to trigger a fresh resolution process against the Corporate Guarantor.”

IFCI had filed petition to initiate insolvency proceedings against ACCIL Hospitality, which had extended a corporate guaranty for Asian Colour Coated Ispat Limited, which is currently under insolvency proceedings. IFCI had contended that liability of ACCIL Hospitality was joint and coextensive with that of the Principal Borrower, ACCL and the mere filing of claim by the financial creditor in the corporate insolvency resolution proceedings could not absolve the Corporate Guarantor of its contractual obligation of discharging the liability.

ACCL was the principal borrower, which had defaulted in clearing its outstanding liability of loan facility of INR 150 crore extended to it by the financial creditor and is going through insolvency process.

The lenders of ACCIL, a steel products manufacturing company, has approved INR 1,500 crore bid by JSW Group, with 79.3 per cent of voting and approval from NCLT is pending.

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Posted By : Rabi Wangkhem on Fri, 21 Feb 2020
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