Gi­tan­jali Gems: ICICI Bank places ap­pli­ca­tion in NCLT

Business Standard - - ECONOMY - ADVAIT RAO PALEPU

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.

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