Gitanjali Gems: ICICI Bank places application in NCLT
ICICI Bank has filed an intervention application in the Union of India (Ministry of Corporate Affairs, or MCA) versus Gitanjali Gems (and others) case, currently being heard at the National Company Law Tribunal (NCLT) in Mumbai.
The MCA has filed a case against Gitanjali Gems under Sections 221,222, 241, 242, and 246 of the Companies Act of 2013.
The special division Bench was hearing applications moved by various respondents in the case, when the counsel for ICICI Bank approached the Bench and informed them of the lender’s wish to see that their security interests, which are laid out in formal contracts, are protected whenever the Bench pronounces an order in the matter.
The counsel informed the Bench that ICICI Bank, along with 23 other lenders of Gitanjali Gems, was planning to move the debt recovery tribunal (DRT), in a joint proceeding, for recovering their respective dues from the company. It was the counsel’s contention that by virtue of being a lender to the company, it had extended loans against which certain securities and interests were created under certified documents.
Given that banks will move to recover their dues under the DRT, there could be a risk that the while proceedings against the company will continue with the NCLT in Mumbai, the Bench may take a decision which might impinge on the lenders’ security interests.
The NCLT Mumbai Bench adjourned hearing this application till May 3, along with the other applications made in the case with respect to Sections 221 and 222.
On April 2, the Mumbai Bench of the NCLT had granted the independent directors of Firestar International (one of the primary respondents in the case) relief in accessing their financial resources, alongside granting liberty to applicants who were having financial difficulties.
The April 2 order has been challenged by the MCA at the National Company Law Appellate Tribunal in New Delhi, which will hear the appeal filed on April 23.