NCLAT overrules BHEL objections, gives nod to Surana Power liquidation

The National Company Law Appellate Tribunal (NCLAT) has held that the liquidation process of a company under the Insolvency and Bankruptcy Code (IBC) holds precedence over outcome of an arbitration proceeding, and therefore process under IBC shall not be stopped.

In its judgment, a three-member Bench of NCLAT held that Bharat Heavy Electricals Limited’s (BHEL) objections to liquidation of Tamil Nadu-based Surana Power were not valid as majority of secured creditors had given their consent to liquidation.

“It would be prejudicial to stall the liquidation process at the instance of a single creditor having only 26.24 per cent share (in value), in the secured assets. The respondent (BHEL) does not hold a superior charge from the rest of the secured financial creditors in the secured assets,” it said.