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    NCLAT stays insolvency process for Gayatri Projects

    Synopsis

    Gayatri Projects, in its letter to the stock exchanges, said “JIL had not fully performed their scope of work as per the contract. There ex ists a dispute between the company and JIL."

    ET Bureau
    Hyderabad: The National Company Law Appellate Tribunal (NCLAT) has on Wednesday stayed corporate insolvency resolution process and appointment of an interim resolution professional for Hyderabad-based infrastructure firm Gayatri Projects.

    In a communique to the bourses, Gayatri Projects said it has moved the appellate tribunal against the orders of the National Company Law Tribunal (NCLT) bench at Hyderabad to initiate corporate insolvency resolution process and appointment of an IRP .

    Gayatri Projects said the NCLT had passed orders last Tuesday the copy of which it received on October 17 with regards to a petition filed by an operational creditor Jaycon Infrastructure (JLL) claiming default of dues of Rs 2.28 crore.

    The Hyderabad firm said JIL worked as one of its sub-contractors for road projects and “initiated a proceeding with NCLT against the company on account of a contractual dispute of Rs 2.28 crore.“

    Gayatri Projects, in its letter to the stock exchanges, said “JIL had not fully performed their scope of work as per the contract. There ex ists a dispute between the company and JIL."

    Further, the company assured that “it is completely solvent and also believes that our appeal with NCLAT will be heard favourably .“

    Earlie r, N C LT bench, comprising Duraisamy and Ravi kumar Durai samy and Rajeswara Rao Vittanala, in its orders noted debt default by Gayatri Projects to sub-contractor and passed orders. The bench observed that Gayatri Projects acted casually in responding to the statutory demand notice served by the operational creditor under IBC.

    Further, while rejecting the contentions made by Gayatri Projects against its sub-contractor, the NCLT bench observed that it was not tenable for the company to raise alleged dispute as an afterthought after the operational creditor moved the Tribunal.

    In an earlier case involving another operational creditor Kolkata-based Macmet Engineering filed against Gayatri Projects in July, the same NCLT bench at Hyderabad disposed of the case after both the parties informed entering into a settlement agreement to amicably resolve the default. Even in this case, Gayatri Projects had disputed the default amount and claimed liquidated damages from the sub-contractor for delayed execution of the contract.



    ( Originally published on Oct 19, 2017 )

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    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

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