Bank invokes insolvency code, attaches seaplane

Company defaulted on loan of over ₹4 crore obtained in 2014

Long overdue: The recovery team of Federal Bank in front of the seaplane that was attached by the bank after the company owning the craft defaulted on loan.

Federal Bank, invoking provisions in the Insolvency Code 2016, has taken possession of a sea plane by using the services of an insolvency professional for recovery of a defaulted loan.

A statement from the bank said that the seaplane company owed more than ₹6 crore to the bank and as the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act did not envisage action on assets such as aircraft, the bank invoked provisions of the Insolvency and Bankruptcy Code 2016 to recover the loan dues.

Seabird Seaplane Pvt. Ltd. had obtained a loan of over ₹4 crore in 2014 from the bank.

The craft was to be deployed for transporting passengers between Kochi and Lakshadweep.

However, the company was unable to repay the loan and it was declared an non-performing asset (NPA) in October 2016, said a senior bank official. The company is now under liquidation.

Parked at airport

The seaplane was parked inside the Kochi International Airport and was taken under custody by K.K. Jose, insolvency professional, appointed by the National Company Law Tribunal. The proceedings at CIAL was co-ordinated by a recovery team of Federal Bank led by Babu K.A., senior vice president, and Mohamed Sageer T.A., vice president. The bank is actively pursuing recovery action especially against big ticket loan defaulters, the statement said.