NCLT Declines Interim Relief To IFFCO

The Ahmedabad bench of the National Company Law Tribunal (NCLT) on Thursday refused to grant interim relief to IFFCO who filed a petition against Swan Energy Limited and its joint venture Triumph Offshore Private Limited (TOPL) from passing board resolutions for substitution of the bank term loan with promoter’s loan without IFFCO's approval which leads to dilution of their stake.

Swan Energy and TOPL promptly responded by filing a detailed reply before the NCLT, vehemently challenging the maintainability of IFFCO's petition, and pleaded that no relief to be granted to IFFCO. They asserted that the petition is completely frivolous and is an abuse of legal process, both in fact and law, and is malicious and vexatious in nature. The respondents accuse IFFCO of filing the petition with mala-fide and malicious intent.

A critical point highlighted in the reply is the timing of IFFCO's petition, coinciding with Swan Energy's capital raise through Qualified Institutional Placement (QIP). Swan Energy and TOPL argued that this temporal alignment is evidence of the IFFCO’s ulterior motive to derail the ongoing capital raise process and the filing of the petition was an ugly tactical move with a sole intention to disrupt Swan Energy's capital raise and tarnish the image of the group. 

As the legal saga unfolds, it brings to light the impact of legal proceedings on business operations. It is understood from the reply filed by Swan that post the filing of the petition, IFFCO has offered to exit its equity stake in Triumph Offshore, therefore nothing survives in the petition filed by IFFCO.