The National Company Law Appellate Tribunal (NCLAT) provided an interim relief to the Khaitans, the erstwhile promoters of McLeod Russel and said that the interim resolution professional appointed for the insolvent bulk tea manufacturer should not take any further steps in the corporate insolvency resolution process. It has further listed the matter for hearing on March 27.

The Kolkata bench of National Company Law Tribunal (NCLT) had, on February 10, admitted an application filed by IL&FS Infrastructure Debt Fund, under Section 7 of the Insolvency and Bankruptcy Code (IBC) and initiated insolvency resolution process against McLeod Russel for a default to the tune of ₹347 crore and had also appointed Ritesh Prasad Adatiya as the interim resolution professional (IRP).

Aditya Khaitan, erstwhile promoter of McLeod Russel had subsequently filed an appeal in NCLAT against the NCLT order.

“...in pursuance of the impugned order passed by the adjudicating authority (NCLT) dated February 10, 2023, IRP shall not take any further steps in the Corporate Insolvency Resolution Process. However, Corporate Debtor shall be run as a going concern including the day to day operations,” NCLAT Principal bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member Technical) held after hearing the submissions of the counsels for Khaitans and IL&FS Infrastructure Debt Fund.

The bench also ordered that the IRP shall run the insolvent company with the assistance of the suspended directors, officers and employees.

It is to be noted that this is the second time the bulk tea major has been admitted under insolvency proceedings. In August 2021, NCLT New Delhi had admitted an insolvency petition filed by Techno Electric and Engineering for default on repayment of term loans to the tune of ₹100 crore. However, the insolvency proceedings were later withdrawn following “a settlement” with Techno Electric.