Setting strict terms of payment, the Kolkata bench of the National Company Law Tribunal (NCLT) has approved the extension of the resolution plan of BTL EPC in respect of debt-ridden McNally Bharat Engineering Company.

The NCLT has extended the resolution plan deadline after BTL EPC, the successful resolution applicant (SRA), “unconditionally” agreed to implement the resolution plan. BTL EPC is the engineering division of Kolkata-based Shrachi Group.

“National Company Law Tribunal, Kolkata Bench has inter-alia approved the extension of resolution plan of BTL EPC in respect of McNally Bharat Engineering Company,” McNally Bharat said in a stock exchange filing on Monday.

Insolvency petition

McNally Bharat, which was an engineering firm of the Khaitan family-led Williamson Magor group, was admitted into the Corporate Insolvency Resolution Process (CIRP) in April, 2022. The insolvency petition against it was filed by Bank of India, one of its financial creditors, under Section 7 of the Insolvency and Bankruptcy Code.

BTL EPC, which had emerged as the highest bidder for the insolvent company, became the successful resolution applicant (SRA) after its resolution plan was approved by the Committee of Creditors on July 27, 2023 by 90.06 per cent majority. The resolution plan was subsequently approved by the NCLT on December 19, 2023, and the effective date for implementation of the plan was February 17, 2024.

However, Bank of India appealed before the tribunal praying for rebooting of the CIRP in favour of the second highest bidder (H2) after BTL EPC had delayed in implementing the resolution plan citing additional imposition or levy of taxes.

“The SRA (BTL EPC) now unconditionally agrees to implement the resolution plan,” the Kolkata bench of the NCLT said in its order dated December 3. “The effective date of the resolution plan is extended from December 17, 2024 to 21 days from the date of uploading of this order,” said the bench comprising justices Bidisha Banerjee and Balraj Joshi.

“An amount of ₹65 crore to be paid by way of demand draft within 24 hours of uploading of this order, which will be held by the erstwhile RP/Chairman of Monitoring Committee in an interest bearing account; and can be appropriated and /or distributed any time on or after the revised effective date. All the MC members will support in ensuring that requirements to implement the plan within effective date are met,” the bench said.

“The SRA will execute an undertaking with immediate effect i.e. within 2 days from uploading of the order wherein the SRA will unconditionally undertake that on payment and after distribution of first tranche of payment or any other payment as envisaged herein the SRA will not insist on upgradation of the account as precondition for making the remaining payments/ instalments of the resolution plan,” it added.

Bank of India has agreed to the terms of payment put forth by BTL EPC. Axis Bank, State Bank Of India, IDBI Bank, Punjab National Bank, ICICI Bank, Union Bank and Indian Bank are also the financial creditors.