IDBI Trusteeship had filed the petition against Cyquator Media, citing the provisions of Section 7 of the Insolvency and Bankruptcy Code along with Rule 4 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The outstanding debt amount was ₹599 crore, and the objectives of the petition were to resolve this financial debt.
The NCLT, comprising Technical Member Anuradha Sanjay Bhatia and Judicial Member Kuldip Kumar Kareer, stated in their order that the arguments presented by IDBI Trusteeship were baseless and lacked substance.
“Based on our careful examination, it is evident that the default occurred in June 2020, which falls within the period covered by Section 10A of the Code. Therefore, this petition cannot be entertained as it is barred by Section 10A and is thus dismissed,” the order states.
Under Section 10A of the Insolvency and Bankruptcy Code, no application for the initiation of corporate insolvency resolution process can be filed for defaults that occurred between March 25, 2020, and September 24, 2020.
This provision was introduced in response to the COVID-19 pandemic and ensuing lockdown on March 25, 2020. The NCLT determined that the default occurred when Cyquator failed to make the payment even after IDBI Trusteeship invoked a guarantee through a notice on June 12, 2020. The counsel for IDBI argued that the default date should be considered as May 13, 2022. Advocate Nausher Kohli represented Cyquator Media in the proceedings.
The bench clarified that this order does not hinder IDBI Trusteeship from recovering the dues from Cyquator through other competent forums or courts.
“Nothing mentioned in this order should be misconstrued as the extinguishment of the debt in question,” the order clarified.
In 2015, Essel Infra Projects issued 425 rated, unlisted, redeemable, non-convertible debentures in two series, with each debenture having a face value of ₹1 crore. The total value of the debentures was ₹425 crore, and they were issued through private placement. The maturity date of the Non-Convertible Debentures (NCDs) was May 22, 2020.
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Basant Kasayap is an entertainment aficionado who delves into the glitz and glamour of the entertainment industry. From Hollywood to Bollywood to regional cinema, she offers readers an insider’s perspective on the world of movies, music, and pop culture.