"Accordingly, the appeal is allowed and the judgement of the NCLAT
is set aside," said the order.
SBI, an important member in the Committee of Creditors (CoC), filed the appeal with the Supreme Court
to set aside the NCLAT
order, alleging that the Appellate Tribunal erred in overriding the commercial wisdom of the CoC. This was the second attempt to bring in an investor to save Orchid Pharma.
Earlier, the NCLT
has nullified a resolution plan by US-based Ingen Capital after it was approved, since the investor allegedly did not bring in money as per the norms.
Orchid Pharma owes around Rs 3,200 crore to a total of 24 banks. Accord, in its appeal at the NCLAT, alleged that Dhanuka’s actual resolution value proposed was Rs 570 crore as against liquidation value of Rs 1,309 crore.
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, close to the liquidation value.
It also said that since there is no other plan more feasible and viable than this plan and there being no mandate saying that the Resolution Plan value shall always be more than the liquidation value of Orchid Pharma in order to let the company remain as going concern and to close out the long drawn process, it is approving the resolution plan of Dhanuka Laboratories. Around 1407 employees are eking their livelihood by working in the company and if there is no solution, the immediate effect will be on the employees, it observed. Dhanuka is a manufacturer and exporter of oral cephalosporin APIs.