NCLAT Stays Essar Oil and Gas Exploration Insolvency

The National Company Law Appellate Tribunal on Tuesday stayed the order of the National Company Law Tribunal's Ahmedabad bench, which had admitted an insolvency petition against Essar Oil and Gas Exploration and Production Ltd.

The petition was filed by Greka Green Solutions (India) Ltd. over an unpaid sum of more than Rs 24 crore.

NCLAT has also issued a notice to Greka Green Solutions, with a hearing scheduled for Nov. 6. Essar Oil and Gas contended that the company had resolved the issue and made the final payment prior to the petition's admission. The company reported a turnover of Rs 800 crore and claimed to employ 425 people.

Essar’s legal representative claimed that the Ahmedabad tribunal had ignored the settlement agreement between the parties when admitting the insolvency petition. The counsel also stated that Essar paid the last installment of the settlement before the insolvency proceedings.

The earlier NCLT order had allowed the insolvency petition citing that the application under Section 9 of the Insolvency and Bankruptcy Code was complete, with the defaulted amount meeting the threshold for initiating insolvency.

Essar, on the other hand, maintained that the insolvency should not have been admitted because the dispute had been resolved through the settlement.