Essar Oil and Gas Exploration and Production Ltd., a key player in India’s energy sector, has been pulled into insolvency proceedings by the National Company Law Tribunal (NCLT) in Ahmedabad. The case stems from a ₹24 crore default on drilling services provided by Greka Green Solutions India Ltd., leading to the legal action.
Essar Oil and Gas, a part of the Essar Group, had contracted Greka for drilling services between May 2016 and March 2023. Despite a settlement agreement in 2019 outlining a nine-installment repayment, Essar failed to meet its obligations. A revised payment schedule agreed upon in 2020 was also disregarded, which prompted Greka to issue a demand notice in October 2022, followed by the insolvency petition.
In response, Essar contested the petition, arguing that it had already repaid a portion of the debt and accused Greka of withholding this information. Additionally, Essar claimed Greka was not an operational creditor and that the services had not been provided directly to Essar, but rather to an assignee.
However, the NCLT ruled against Essar, stating the debt was valid and exceeded the minimum threshold required for insolvency proceedings. The tribunal observed that Essar had acknowledged the debt, and the breach of the settlement agreement warranted the proceedings. The tribunal also cited precedents from the National Company Law Appellate Tribunal (NCLAT), reinforcing its decision to admit the case.
Mohit Bipinchandra Adatiya has been appointed as the Interim Resolution Professional (IRP) to oversee the process, and he will manage the company’s operations and assets while a Committee of Creditors is formed.
