Key Points
Mumbai: In a setback to banks, the Kolkata bench of the National Company Law Tribunal (NCLT) has dismissed a petition by the Central Bank of India to start insolvency proceedings against Simplex Infrastructures, noting that the engineering company still has pending dues from government agencies and other contractors stuck in arbitration...
These potential cash flows could help it pay back creditors, said the court, while ruling against the applications seeking the initiation of bankruptcy proceedings...
Simplex owes lenders led by Punjab National Bank (PNB) a total of 9,600 crore and is one of the largest accounts to be taken to the bankruptcy courts in recent times.. ..
"The balance sheets of the corporate debtor do not show a negative net worth and as such cannot be termed as insolvent...This uncertainty is undoubtedly, a situation where the company though not being able to pay its debt cannot be termed as insolvent, as it has a much large amount of claims waiting to be released in its favour," Banerjee and Joshi wrote...
"We are not satisfied that this application needs to be admitted for if that was done it might create a larger harm to the corporate debtor," the order said.. Bankers said that although a review petition has been filed at the Supreme Court in the VIPL case, the damage it has done will take time to undo..
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