“The onus is now on the company to go to the NCLT tribunal and get a stay against this order,” said a lawyer in Mumbai. It will have far reaching impact on other similar cases which are now being taken up by the other NCLT bench, he added.
As per the IBC, a company will get 270 days to resolve the issue in which an insolvency professional would be appointed and the present board of directors would be suspended. After 270 days, the professional can sell the company’s assets for recovery of the loan. But as per the NCLT order, instead of waiting for the 6-month’s standstill period, the insolvency professional can go ahead and sell promoters personal property which is pledged with the banks.
On examination of the Balance Sheet, a huge contract is apparent. On left hand side of the Balance Sheet, the liability is stated to be approximately Rs 5,30,00,000/-, but on the right hand side; the fixed assets, fixed deposits, Bank Guarantee are significantly insufficient. The Insolvency Professional thus can iron out all these creases. The details of reserves and Surplus need due examination. The possibility of recovery from Sundry Debtor, are substantial in nature which requires due consideration,” the court said.
Going by this definition, many companies, which are facing proceedings in the NCLT bench, are staring at the loss of their properties even before the stipulated period.