The Delhi High Court has dismissed a writ petition filed by ERA Infra Engineering Ltd. seeking to restrain the National Asset Reconstruction Company Ltd. (NARCL) from initiating recovery proceedings against its three special purpose vehicle (SPV) subsidiaries, Bareilly Highway Project Ltd., Haridwar Highway Project Ltd., and West Haryana Highway Project Ltd. before the NCLT and DRT.
ERA Infra, which underwent corporate insolvency resolution in 2018, had its resolution plan approved by the NCLT in June 2024, with Respondent No. 2 as the successful resolution applicant. A “Sharing of Arbitral Proceeds” (SAP) agreement was executed in September 2024 between ERA Infra, its lenders, and NARCL, providing that arbitral awards in disputes between the SPVs and NHAI would be shared as per the resolution plan.
The petitioner argued that NARCL, despite being a signatory to the SAP agreement and bound by Section 31 of the Insolvency and Bankruptcy Code (IBC), had initiated parallel recovery actions before different forums, undermining the resolution plan. NARCL opposed the petition, contending that ERA Infra had alternate remedies under the IBC, and accused it of forum shopping.
The Court held that disputes over the interpretation and implementation of the resolution plan fell within the jurisdiction of specialised IBC forums, not under Article 226 writ jurisdiction. It observed that ERA Infra had previously approached the NCLT and NCLAT in related matters and must exhaust statutory remedies. Finding the petition premature in respect of some SPVs and noting no public law issue warranting interference, the Bench vacated its earlier interim stay of 27 March 2025 and disposed of the petition.
Appearances:
Petitioner: Dr. Abhishek Singhvi, Sr. Advocate, Mr. Dayan Krishnan, Sr. Advocate with Ms. Kaveri Rawal, Ms. Zinnea Mehta, Mr. Sukrit Seth and Mr. Yash Johri, Advocates
Respondent: Mr. Arvind Nigam, Senior, Mr.Vaibhav Gaggar, Sr. Advocate with Ms. Smriti Churiwal, Mr. Jaiveer Kant, Ms. Ambikka Singh, Advocates for R-1.
Ms. Arundhati Katju, Sr. Advocate with Ms. Tanushvi, Ms. Swati Kwatra, Mr. Anshuman Jindal, Advocates for R-2.
Mr. Ashish Verma, Mr. Saksham Thareja, Mr. Kartikay Bhargava, Advocates for R-3 with RP Mr. Sandeep Goel.
Mr. Siddharth Yadav, Sr. Advocate with Mr. Manav Goyal, Advocate for R-4 & 5.
Mr. Krishnan Venugopal, Sr. Advocate with Mr. Manav Goal, Advocate
