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NCLAT rejects Kotak Bank's plea to set aside insolvency proceedings against MSEL

Economic Times  

The National Company Law Appellate Tribunal (NCLAT) has dismissed a petition filed by Kotak Mahindra Bank with a director of debt-ridden McNally Sayaji Engineering Ltd (MSEL) to set aside insolvency proceedings against the manufacturer of mineral processing equipment. It upheld the orders of the Kolkata bench of the National Company Law Tribunal (NCLT), which had on February 11, 2021, admitted a plea by ICICI Bank and directed to initiate insolvency proceedings against MSEL. Kotak Mahindra Bank had contended that besides it, four other banks -- ICICI Bank, DBS, IDBI and SBI -- had advanced loans to MSEL and NCLT had failed to appreciate that more than 50% members of the lenders' consortium had opposed initiation of corporate insolvency resolution process (CIRP), as they were considering restructuring of loan outside the IBC. Restructuring of loans is more beneficial to the creditors as they will not have to take a haircut, Kotak Mahindra Bank had submitted.