PENDING RESOLUTION

The insolvency proceedings of Era Infra Engineering Ltd are a testimony to everything that is wrong with the Insolvency and Bankruptcy Code (IBC) — a set of laws whose main objective was to revive a debt-ridden company. Hailed as one of the biggest ‘reforms’ of the Narendra Modi-led government, the IBC is fast losing its cheerleaders as inordinate delays and unending litigation defeat the purpose — faster resolution of loan default cases — for which it was brought in at the first place.

Era Infra Engineering is a case in point. It is one of the 12 large loan default cases referred by the Reserve Bank of India (RBI) for resolution in June 2017 through the then newly implemented IBC. While all other cases have seen some kind of closure, either through resolution or liquidation, Era Infra is still work in progress — the Committee of Creditors (CoC) is yet to decide between the two plans.

Era Infra is an EPC (Engineering, Procurement and Construction) contractor engaged in execution of large highways, airports and industrial projects since the 1990s. It owes ₹17,000 crore to 27 financial creditors (according to the latest updated claims as on August 31, 2020) and ₹775 crore to operational creditors. Operational debts include direct and indirect tax dues, municipal fees, EPF