The bankruptcy and insolvency law has finally caught up with Sudip Dutta, the promoter of Ess Dee Aluminium, whose incredible rags-to-riches story came to an end.
Dutta, a migrant labourer in Mumbai, who went on to own a big chunk of the packaging industry once he worked for, is now re-entering the insolvency process with the revocation of a stay order his company managed to get from the Calcutta High Court.
With the stay order gone, the bankers can now set up the Committee of Creditors, the recent order of the Kolkata bench of National Company Law Tribunal has said.
"The interim order is thereby vacated directing the Interim Resolution Professional to proceed with the CIRP (Corporate Insolvency Resolution Process) by constituting the CoC (Committee of Creditors) as per law," Judge KR Jinan said in his October 4 order.
Some of the Rs 865 crore of loans given by banks to Ess Dee, half of which was lent by State Bank of India, may now be recovered.
In its order, NCLT has ruled that resolution process can't be prevented just by paying off one of the many creditors of Ess Dee, which was one of the largest packaging suppliers to the pharma and FMCG sector.
"Here the State Bank of India which is representing the consortium bank already filed its claim and came forward to participate in the proceedings, which has been ordered to be initiated against the corporate debtor," the NCLT order says.
"Admittedly, the settlement arrived at by the operational creditor and the corporate debtor is without the participation of other claimants who came forward subsequent to the public announcement. So their claims can't be neglected for the reason that the corporate debtor has discharged its liability due to one of the operational creditors," the order says.
The NCLT on June 18 ordered an initiation of insolvency process for Ess Dee Aluminium following an application by one of its operational creditor, packing ink supplier Cytech Coatings.
Ess Dee, however, contested the ruling at the High Court after successfully arguing that it was heard ex-parte and that it operated out of Mumbai and not from its Kamarhati plant (near Kolkata) where the NCLT notice was served.
The company got a conditional stay upon the settlement of dues of that ink supplier which it later settled.
The removal of the stay and restarting the insolvency process brings to an end to the story of Dutta, who once migrated from Bengal and landed in Mumbai to work as a coolie for a packing unit.
As the factory turned sick, Dutta bought it out for a princely sum of Rs 16,000 and went on to become a listed company in 2006 and followed it up by taking over the India Foils unit of Vedanta in 2008.
It's a story Dutta always loved to tell till his arrest for defaulting on provident fund dues in 2017.
BACK IN TROUBLE
- With the stay order gone, the bankers can now set up the Committee of Creditors
- Some of Ess Dee’s Rs 865 crore of loans may now be recovered
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