Lingamaneni company under insolvency

Lingamaneni company under insolvency

NCLT orders insolvency process against LEPL Projects as it fails to clear dues to Germany’s MTU

Hyderabad: The Amaravati Bench of National Company Law Tribunal (NCLT) ordered insolvency process against LEPL Projects Limited as the latter failed to clear pending dues to Germany's MTU Maintenance Berlin-Brandenberg GMBH (MTU Berlin) which provided services to Air Costa, a regional low-cost airline launched by the Vijayawada-based business group in 2013. The airline stopped its operations in February 2017.

Mohammed Ajmal, Member (Judicial), Amaravati Bench of NCLT, in his 22-page order dated November 14, admitted the petition filed by the German company seeking insolvency process against LEPL Projects under Section 9 of Insolvency & Bankruptcy Code (IBC), and appointed Medarametla Srinivasa Mano Ranjani as interim resolution professional (IRP). MTU Berlin will be treated as the operational creditor.

"The Corporate Insolvency Resolution Process (CIRP) of the respondent company namely LEPL Projects Limited shall commence from this date and shall be completed in 180 days", he said in his order.

LEPL Projects, owned by Lingamaneni Ramesh, is also into real estate and infrastructure sectors. LEPL stands for Lingamaneni Estates Private Limited.

The Ludwigsfelde, Germany-based MTU Berlin knocked at the doors of NCLT Amaravati on January 24 this year saying LEPL Projects defaulted on the payments to it and sought insolvency process against LEPL Project.

The German company signed an agreement with Air Costa owned by LEPL Projects in November 2014 to provide maintenance, repair and overhaul (MRO) services to CF 34 type of aircraft engines leased from MTU-Netherlands.

In May 2015, Air Costa took one CF 34-8E engine on lease from MTU-Netherlands with which it has a leasing agreement.

"Despite getting lease of the engine, the respondent (LEPL Projects) did not make required payments.

The lease agreement was assigned to the petitioner (MTU Berlin) in September 2015. The respondent also defaulted in payment under the maintenance agreements," the NCLT noted in its order.

However, LEPL Projects, which is also into real estate and infrastructure, entered into a settlement agreement in September 2016 with MTU Berlin and MTU Canada and agreed to pay $1.99 million towards consolidated dues. LEPL Projects failed to make the payments in instalments as agreed upon.

Following this, MTU Berlin and MTU Canada moved a debt collection claim before the Queen's Bench Division of the High Court of Justice, London in January 2017. The London Court in its order in March 2017 directed a payment of $2.46 million and Euros 19,400 with interest respectively of $95,635.25 and Euros 503.

It also slapped costs of claim and application. As LEPL Projects failed make payments as per the London Court order, MTU Berlin moved the NCLT's Amaravati Bench in January this year. However, the NCLT Judge said that the order passed by London court would not be maintainable under IBC.

"The foreign decree of the Queen's Bench passed ex prate is not maintainable against the respondent in terms of the Code (IBC). The decree is not executable. Thus, the amount in the decree could not be taken as a 'debt due' against the respondent," he said in his order.

He also dismissed an interim application filed by LEPL Projects to refer the dispute for arbitration. "The action before this forum thus can't be said to be a subject matter of an arbitration," the order said.

Show Full Article
Print Article
Next Story
More Stories