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NCLT Refuses To Stay Insolvency Proceedings Against Reliance Naval

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Anil Ambani’s Reliance Naval and Engineering Ltd.’s plea to stay insolvency proceedings initiated by state-run development bank IFCI Ltd. has been rejected.

The National Company Law Tribunal’s Ahmedabad bench gave the company seven days to file an appeal against its order.

Reliance Naval is the second Anil Ambani group company after Reliance Communications Ltd. to be dragged to the NCLT by lenders. It had requested the tribunal to halt the proceedings on grounds that the Insolvency and Bankruptcy Code itself has been challenged before the Gujarat High Court. The NCLT didn’t grant any relief.

IFCI, a financial lender to Reliance Naval, initiated the insolvency proceedings last month against the company and its subsidiary Reliance Marine and Offshore Ltd. for defaulting on its Rs 159-crore loan.

The company said there were no merits in IFCI’s application since it was an unsecured creditor. The lender rejected the claim, saying the loan was secured by a guarantee extended by Reliance Naval. It also said none of the creditors to the two companies had reached out to resolve the matter out of the NCLT.

The tribunal will hear the petition against Reliance Naval and Reliance Marine on Jan. 11.

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