NCLT to send Samay Electronics case to 3rd member after split verdict

Appellate tribunal NCLAT has directed that a plea by JM Financial Asset Reconstruction Company to initiate insolvency proceedings against Samay Electronics be placed before a third member of the NCLT Ahmedabad bench after two other members of the same bench gave a split verdict in the matter.

The two-member Ahmedabad bench of the National Company Law Tribunal (NCLT) had delivered the split verdict on February 26, 2020.

The technical member directed admitting the application filed under Section 7 of the Insolvency and Bankruptcy Code to initiate the proceedings, while the judicial member gave a dissenting view, rejecting the plea.

Following this, JM Financial Asset Reconstruction Company, which is acting as a trustee of JMFARC-SBI, approached the National Company Law Appellate Tribunal (NCLAT).

The NCLAT has now directed the NCLT to place the matter before a third member so that it is decided by a majority.

"After hearing learned counsel for the appellant, we deem it appropriate to dispose of this appeal with direction to the same Bench of the Adjudicating Authority, which passed two conflicting orders, to make a reference to President, NCLT, if not already made..."

"... for hearing on the issues and points on which the two Members of the Bench had a divergent view in the split verdict so that the matter is placed before a third Member for hearing and the Company Petition is decided in accordance with the opinion of the majority of the Members who heard the case including the member before whom it is placed," the NCLAT said.

Samay Electronics, based in Rajkot, Gujarat, is facing claims of Rs 44.72 crore from financial creditors for term loan and cash credit provided to the company.