Prime Focus on May 12 succeeded in getting an order passed by the National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, staying the NCLT’s (Bombay bench) order dated May 6. After the NCLAT order, the Interim Resolution Professional shall not take any further steps in pursuance of the NCLT order.
The NCLAT ordered Prime Focus to deposit Rs. 353.79 crore in an interest-bearing account with the Registrar, NCLAT, on or before May 20. The matter was listed for further hearing on July 9.
It may be recalled that the NCLT had on May 6 initiated section 7 (insolvency) proceedings for total amount of Rs. 353.79 crore which includes the principal amount of Rs. 200 crore, interest and default interest claimed by Reliance Alpha Services Pvt. Ltd. The counsel for Prime Focus submitted that the company was solvent with 12,000 employees, and it had not only liquidity but also assets of much more amount. The counsel submitted that Prime Focus was ready to deposit entire amount in the court in an interest-bearing account within a week.
The dispute relates to Reliance claiming that the amount of Rs. 353.79 crore was due under a loan agreement executed in 2019. Prime Focus maintains that no amount was ever disbursed by Reliance to it under the loan agreement in question. It, therefore, believes that Reliance does not qualify as a “financial creditor” within the meaning of the Insolvency and Bankruptcy Code. According to Prime Focus, the dispute pertains to a business transfer agreement entered into in 2014 between Prime Focus and an affiliate of Reliance Alpha Services. It is contesting the amounts claimed under the business transfer agreement too.
