India: NCLT order on OMDC put on hold till next hearing
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In a new development for Orissa Minerals Development Company (OMDC), a subsidiary of state-owned Rashtriya Ispat Nigam, the Company Law Appellate Tribunal (NCLAT), vide an order dated 12, October 2020, has issued a notice to Jai Balaji Industries and the interim resolution professional (IRP) and directed that the order dated September 30, 2020 of NCLT, Kolkata, be "put on hold" till the next date of hearing, i.e. November 23, 2020, SteelMint has exclusively learnt.
This order comes close on the heels of an appeal filed by OMDC in the NCLAT, at New Delhi, against an order dated September 30, 2020 passed by NCLT, Kolkata, admitting a petition under Section 9 of the IBC code filed by M/s Jai Balaji Industries and appointing an IRP.
"The Hon'ble NCLAT, vide order dated 12th October 2020 was pleased to issue a notice to Jai Balaji Industries and the IRP and direct that the order dated 30.9.2020 of NCLT, Kolkata be PUT ON HOLD till next date of hearing i.e. 23.11.2020," D.K. Mohanty, Managing Director, OMDC, informed SteelMint.
Jai Balaji Industries is a purchaser of iron ore from OMDC. There was a mismatch in an earlier agreement, because of which it dragged OMDC to the NCLT, Kolkata, it is learnt.
This is the second time that the Corporate Insolvency Resolution Process (CIRP) under the provision of IBC, 2016, has been initiated against the company, which owns several iron ore blocks.
The court accepted the bankruptcy case and appointed an interim resolution professional, Sandip Choraria, to execute the process.
Mining yet to resume
OMDC operates six iron ore and manganese ore mining leases at Barbil in the district of Keonjhar, Odisha. The leases are Dalki Manganese Mines, Kolha Roida Iron & Manganese mines, Thakurani Iron & Manganese Mines, Belkundi Iron & Manganese Mines, Bagiaburu Iron Mines, and Bhadrasahi Iron & Manganese Mines. The lease rights of all the six mines had expired and, therefore, the company mining operations were under suspension due to the non-availability of statutory clearances.
A recent Supreme Court order allowed OMDC to resume mining operations in this eastern state after getting the necessary clearances. Post-this order, the case was referred to the Odisha state government's department of steel and mines, from whom the directorate is
awaiting directives.
Mining operations were targeted to resume at OMDC's Bagiabur iron ore mine by October. Sources informed that "although mining has not started yet, the process is on".
Since mining leases are in the process of renewal, accordingly, the financial results for the year ended March 31, 2020, have been prepared on a "going concern basis", stated the company's note attached with the audited results for the year ended March 31, 2020, and filed with the stock exchanges.
