The National Company Law Appellate Tribunal (NCLAT) in New Delhi has set aside an order approving Dhanuka Laboratories Ltd.’s resolution plan for Orchid Pharma.
In June this year, the Chennai Bench of the National Company Law Tribunal (NCLT) had given approval for the resolution plan and rejected the one submitted by Accord Life Spec, part of the ₹1,700-crore Accord Group established by DMK MP S. Jagathrakshakan.
Accord had moved NCLAT against this order.
The actual ‘resolution value’ proposed by M/s. Dhanuka Laboratories Ltd. is ₹570 crore as against the ‘liquidation value’ of ₹1,309 crore, Accord said in its petition.
It further submitted that equity infusion of ₹40 crore as working capital by Dhanuka cannot be included in the resolution value for the purpose of finding out the value of the ‘plan’.
The NCLAT noted that the basic feature of the IBC was that an operational creditor cannot be paid anything less than the ‘liquidation value’ and the basic principle is the maximisation of the assets of the ‘corporate debtor’, balancing all stakeholders by maximisation of their assets.
No ‘resolution plan’ can offer any amount upfront or by other way, which is less than the ‘liquidation value’. It will be against the object of the Code as also the provisions of Section 30(2) of the IBC, it said.
The matter stands remitted to the Adjudicating Authority for decision in accordance with law. Orchid figured in RBI’s second list that had names of 28 large defaulters.
