NCLAT set aside insolvency proceedings against McLeod Russel

The National Company Law Appellate Tribunal (NCLAT) has set aside the insolvency proceedings against leading bulk tea producer McLeod Russel following a settlement between the promoter and IL&FS Infrastructure Debt Fund. A supplementary affidavit was filed before NCLAT by the appellant (Aditya Khaitan), whereby an agreement between the parties dated May 5, 2023 was brought on record.

The financial creditors also informed the appellate tribunal they already settled the matter with the promoter Khaitans and there are no issues between the parties. Following this, a two-member NCLAT bench closed the Corporate Insolvency Resolution Process (CIRP) initiated by the Kolkata bench of the National Company Law Tribunal (NCLT) on February 10, 2023.

"In view the aforesaid, settlement agreement is taken on record, we close CIRP initiated by order dated 10.02.2023. Order dated 10.02.2023 is set aside," said NCLAT order, which was uploaded on the website on Tuesday evening. During the proceedings, the financial submitted that "in the event of default, liberty be given to revive the appeal."

Moreover Interim Resolution Professional (IRP) also submitted that certain dues have not yet been paid.

On this counsel for the appellant submitted "considerable amount of expenses has been paid and if any amount is unpaid, that shall be taken care of," the NCLAT order noted. NCLAT direction came over the petition filed by Aditya Khaitan, chairman of the company, against the NCLT order.

Earlier on February 22 this year, passing an interim order, NCLAT had stayed the CIRP and directed the Interim Resolution Professional (IRP) "not take any further steps".

However, it had directed IRP to run McLeod Russel as a going concern including the day to day operations with the assistance of its suspended board. NCLT had directed to initiate CIRP against IL&FS Infrastructure Debt Fund plea over default in payment of Rs 347.4 crore as on November 12, 2019, of which the principal amount is about Rs 252.66 crore.