The National Company Law Appellate Tribunal (NCLAT) on Tuesday disposed of a petition filed by the Department of Telecommunications (DoT) challenging the Rs 2,962-crore takeover bid by Anil Agarwal’s Twin Star Technologies for Videocon Industries.
A two-member bench observed that the appellate tribunal earlier this month had already set aside the June 8 order passed by the Mumbai bench of the National Company Law Tribunal (NCLT) approving Twin Star’s bid and remanded the matter back to the Committee of Creditors (CoC) of Videocon.
“Counsel for the parties agreed that this Appeal be also disposed off in terms of the judgment dated 05.01.2022. The Appeal is allowed in terms of the judgment dated 05.01.2022 …,” the NCLAT said.
Earlier on January 5, the NCLAT set aside the NCLT order after observing that the approval to the takeover plan was “not in accordance with” Section 31 of the Insolvency and Bankruptcy Code (IBC) and quashed “the approval of Resolution Plan by the Committee of Creditors (CoC) as well as Adjudicating Authority (NCLT)”.
NCLAT had asked the creditors to initiate fresh sale of Videocon, a consumer durables company manufacturing products ranging from air-conditioners to washing machines, for recovery of their unpaid dues of Rs 64,637.6 crore.
The appellate tribunal’s order had come over petitions filed by dissenting creditors Bank of Maharashtra, SIDBI and IFCI Ltd.
The DoT had also challenged the NCLT order before the appellate tribunal and submitted that defaulting telecom firms cannot be permitted to wriggle out of their liability by the triggering of the corporate insolvency resolution process.
One of the group firms, Videocon Telecommunications, in order to carry on business as per the licence agreement for Unified Licence (Access Services) had secured dues with as many as 131 bank guarantees from SBI in favour of DoT to the tune of Rs 881.92 crore.
The state-owned lender’s guarantees, however, have “illegally” not been allowed to be invoked due to pending proceedings before the NCLT, the DoT had submitted.