NCLT directs Bank of Baroda and Resolution Professional to provide Pravin Herlekar, former OSCL director, with a detailed breakdown of the ₹290.05 crore claim in ongoing insolvency proceedings | Representational Image
Mumbai: The National Company Law Tribunal (NCLT) has directed the Resolution Professional (RP) of Omkar Speciality Chemical Limited (OSCL) and the Bank of Baroda (BoB) to provide Pravin Herlekar, the erstwhile director of OSCL, with copies of all details and a detailed break-up of BoB’s claim amounting to Rs 290.05 crore. The claim was admitted by the RP as part of the ongoing Corporate Insolvency Resolution Process (CIRP) of OSCL.
The Tribunal, while issuing its order, noted that suspended directors are vital stakeholders in the CIRP and, given their familiarity with the company’s affairs, can assist the RP in scrutinizing creditor claims. It stated, “We do not see any valid reason to deny the applicant the opportunity to verify this information… We also find no confidentiality concern in sharing copies of such documents with the suspended directors of the Corporate Debtor.”
OSCL, a specialty chemicals manufacturer incorporated in 2005 with units in MIDC, Badlapur, has been under CIRP since December 2022 following a petition filed by operational creditor Ela Enterprises. Previously, in 2021, the Central Bureau of Investigation (CBI) had booked the company and its eight directors for allegedly causing a Rs 145.51 crore loss to BoB.
The dispute over BoB’s claim arose when the Interim Resolution Professional (IRP) initially admitted a claim of Rs 145.51 crore. However, after further submissions, the RP approved BoB’s claim at Rs 290.05 crore—nearly double the earlier amount. This increase was challenged by Herlekar, who alleged inconsistencies in the claim calculations.
Herlekar contended that BoB’s initial demand of Rs 170.90 crore in 2018 included a $12 million (Rs 88 crore approx.) External Commercial Borrowing (ECB) loan, which was later transferred to Lasa Supergenerics Ltd. He argued that this loan should not be part of OSCL’s liability, effectively reducing BoB’s claim to Rs 146 crore.
Additionally, he pointed out that BoB had recovered Rs 20 crore by selling OSCL’s properties under the SARFAESI Act before CIRP was initiated, raising concerns over the methodology used by the RP in accepting the revised claim.
In his application to the Tribunal, Herlekar alleged that the RP and BoB were colluding to inflate BoB’s claim to secure higher voting rights in the Committee of Creditors (CoC). He stated that despite multiple requests in September and October 2023, the RP failed to provide a detailed breakdown of how BoB’s claim was calculated, instead directing him to the Insolvency and Bankruptcy Board of India (IBBI) website, which only listed the admitted amount without specifics.
“The RP should have given a detailed explanation for modifying and admitting a substantially increased claim, and BoB must offer satisfactory reasons for submitting proof at such a belated stage,” Herlekar’s application read.
Both BoB and the RP opposed Herlekar’s application. The RP stated that BoB submitted its Form C claim of Rs 290.05 crore on January 3, 2023, along with bank statements. Initially, the IRP had admitted only Rs 145.51 crore, pending further verification. However, BoB later provided additional supporting documents, following which the entire claim was admitted.
BoB also argued that its Ras Al Khaimah, UAE branch had sanctioned a $12 million ECB facility to OSCL in 2012, secured against OSCL’s Lote Parshuram Industrial Area unit in Khed. Furthermore, the bank maintained that all SARFAESI proceeds were deducted from OSCL’s outstanding liabilities, and the ECB loan was excluded from the final claim.
The RP and BoB further contended that as per CIRP regulations, the list of creditors must be made available for inspection, but there is no provision granting erstwhile directors the right to challenge an admitted claim. They argued that Herlekar had “no locus” to pursue the matter.
Rejecting these objections, the NCLT ruled that Herlekar is entitled to examine the claim details, given his role as an ex-director. The Tribunal emphasized that transparency in insolvency proceedings is crucial to maintaining fairness and ordered the RP and BoB to provide a comprehensive breakdown of the admitted claim.
