Aniket PujariThe National Company Law Appellate Tribunal (NCLAT) has set aside the bankruptcy case against Essar Oil and Gas Exploration and Production Ltd (EOGEPL), a subsidiary of Essar Group.
An NCLAT bench led by chairperson Justice Ashok Bhushan overturned the National Company Law Tribunal (NCLT) order, based on a petition from Greka Green Solutions (India) Ltd, which claimed it was owed ₹24.38 crore (about $2.96 million). On 10 September 2024, NCLAT had passed an interim order staying the NCLT ruling.
The Ahmedabad bench of the NCLT had admitted the insolvency plea against EOGEPL on 6 September 2024, and appointed Mohit Bipinchandra Adatiya as the interim resolution professional (IRP) to manage the company’s affairs until a committee of creditors (CoC) was formed.
The tribunal upheld Greka Green Solutions’ claim, saying the debt was valid, exceeded the insolvency application threshold, and arose from acknowledged operational expenses. It also referenced past judgements that upheld insolvency proceedings in cases where settlement agreements had been breached.
‘Settlement was ignored’
However, Pankaj Kalra, the suspended director of EOGEPL, argued before the NCLAT that a final payment had been made under a settlement agreement before the insolvency petition was filed. He said the insolvency proceedings failed to acknowledge this settlement and argued that Essar Oil and Gas Exploration, with a turnover of ₹8 billion and 425 employees, should not have been admitted into insolvency without considering the settlement.
“We are a profitable company with revenues of ₹870 crore and an operating profit of ₹625 crore. The suspension will allow us to maintain our focus on our core operations and ensure that our business activities continue without disruption,” the company had said in an earlier statement.
12-year-old dispute
The dispute dates back to a 2 December 2013 drilling services contract between Essar Oil Limited (EOL) and Greka Green Solutions. On 19 June 2017, EOL transferred its contract obligations to EOGEPL.
The parties reached a settlement in 2019, with payments staggered across nine instalments. However, Essar allegedly failed to comply. A revised payment plan in February 2020 also did not materialise, leading to a demand notice in October 2022 and the subsequent insolvency petition.
This led EOGEPL to challenge the insolvency order in NCLAT, which overturned it.
