[ By Bobby Anthony ]The Supreme Court of India has set aside a National Company Law Appellate Tribunal's (NCLAT) order which had rejected a resolution plan proposed by Gurgaon-based Dhanuka Laboratories for the debt-ridden Chennai-based company Orchid Pharma.The Supreme Court order is virtually a green signal to Dhanuka Laboratories' resolution plan, which was approved by the National Company...
The Supreme Court of India has set aside a National Company Law Appellate Tribunal's (NCLAT) order which had rejected a resolution plan proposed by Gurgaon-based Dhanuka Laboratories for the debt-ridden Chennai-based company Orchid Pharma.
The Supreme Court order is virtually a green signal to Dhanuka Laboratories' resolution plan, which was approved by the National Company Law Tribunal (NCLT) in June 2019.
The Supreme Court observed that the NCLAT's judgment had to be set aside in view of a recent judgment which held that no provision in the Insolvency & Bankruptcy Code was brought to the court's notice.
Earlier, the State Bank of India (SBI), an important member in the Committee of Creditors (CoC), had filed an appeal with the Supreme Court to set aside the NCLAT order, alleging that the NCLAT had erred in overriding the commercial wisdom of the Committee of Creditors (CoC).
Orchid Pharma owes around Rs 3,200 crore to a total of 24 banks.
The NCLT, in its order in June, 2019, noticed that according to the resolution professional's explanation, while Dhanuka’s resolution plan value was Rs 570 crore, which is lower than the liquidation value of Rs 1,309 crore, Orchid Pharma had a cash and bank balance of Rs 321.98 crore.
This and some other factors brought the plan value to around Rs 1,116.04 crore, which is close to the liquidation value.