HC stays insolvency proceedings against Naraingarh Sugar Mills

Tribune News Service

Chandigarh, December 22

The Punjab and Haryana High Court today stayed insolvency proceedings against Naraingarh Sugar Mills Limited after taking note of the contentions that 31,000 acres in Ambala, Yamuna Nagar, parts of Punjab and Panchkula were under sugarcane cultivation.

Management in capable hands

Since the management of the petitioner is in the capable hands of the officials working under the supervision of the respondent, it would not be appropriate to replace them at this stage with interim resolution professional. Justice MS Ramachandra Rao & Justice Sukhvinder Kaur, punjab and haryana high court

Allowing the National Company Law Tribunal at this point of time to proceed with the matter was likely to lead to an uproar from the farmers’ community as they had nowhere to sell their produce.

The Bench of Justice MS Ramachandra Rao and Justice Sukhvinder Kaur also took note of the fact that it might also lead to labour unrest and other untoward incidents. The mill had moved the High Court against the Union of India and other respondents through senior counsel Anand Chhibbar with advocates Shikhar Sarin and Vaibhav Sahni.

Among other things, they told the Bench that the mill incorporated under the Companies Act, 2013, was currently under the supervision and management of the state government officials. It was an admitted fact that substantial funds had been released by the respondent — State of Haryana — by the way of loans towards its working capital, running of the mill, salaries and payment to the farmers. Yet, there were dues owed by the mill to the respondents — Indian Renewable Energy Development Agency Limited and two banks.

The Bench observed it appeared that these respondents had filed applications before the tribunal the Insolvency and Bankruptcy Code.

“The sugarcane crushing season has started and as per the statutory regime, the farmers in the area specified have to sell sugarcane only to the petitioner and cannot sell in the open market…. Since the management of the petitioner is in the capable hands of the officials working under the supervision of the respondent, it would not be appropriate to replace them at this stage with interim resolution professional (IRP), who may not have the requisite experience to run the sugarcane mill with all the problems,” the Bench observed.

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