NCLAT rejects bankruptcy board's plea against telecom tower firm GTL Infra

Corporate debtor's business is sustainable and it is a viable going concern, NCLT had ruled

The National Company Law Appellate Tribunal (NCLAT) has dismissed as "infructuous" a plea by the Insolvency and Bankruptcy Board of India, saying IBBI has nothing to do with the litigation between lenders and GTL Infrastructure.

The Mumbai bench of the National Company Law Tribunal (NCLT) last November dismissed a petition by Canara Bank against GTL Infrastructure and associate unit GTL, saying both companies are going concerns and are repaying their debt.

As per the NCLT order, GTL Infrastructure, a telecom tower company, has monthly revenues of Rs 120 crore (net of GST), showing that it is a viable going concern. "Further, the company has repaid an amount of Rs 16,915 crores between 2011 to August, 2018, which clears that the position of the corporate debtor is reasonably healthy and is in a position to repay the sustainable debt," the order had said.

"The corporate debtor (GTL Infrastructure) has made claims aggregating to Rs 13,393.83 crores against Aircel entities. Further, this Tribunal has directed to pay approx. Rs 900 crores to the corporate debtor, same has been pending on appeal. Moreover, the corporate debtor has to recover Rs 49.84 crores from Tata Teleservices; Rs 20.38 crores from ATC and Rs 351 from BSNL in pending arbitration proceeding. The amount received would be sufficient to pay the debt of the petitioner (Canara Bank)," the NCLT had said.

Citing the Vidarbha Industries case, the NCLT said the business of the corporate debtor is sustainable and it is a viable going concern under its current management and the overall financial health of the corporate debtor is not bad enough to be admitted under bankruptcy.

Moreover, the adjudicated and un-adjudicated claims of the GTL Infrastructure are far more than the debt claimed in the present petition.  

The NCLAT said as the NCLT has dismissed the bank's petition, it was refraining from expressing any opinion on merit as to whether IBBI is authorised to file a petition or not and hence the petition is dismissed as "infructuous.”

NCLAT in March will hear a separate petition filed by Canara Bank in the GTL Infrastructure matter.

Lenders received an additional Rs 1900 crore from the Edelweiss Asset Reconstruction Company (EARC) when it purchased the debt from banks. Thus, the aggregate payment to banks is almost Rs 19,000 crore since its debt restructuring in 2012.

GTL Infrastructure has argued that it is not a defaulter as it has made payments to banks in time as per debt restructuring scheme.