The National Company Law Appellate Tribunal has allowed the withdrawal of an application filed by the promoters of McLeod Russel India Ltd after taking on record the settlement reached with IL&FS Infrastructure Debt Fund, effectively bringing down the curtains on the insolvency proceedings.

While the order is yet to be uploaded, multiple sources confirmed that the bench of Justice Ashok Bhushan (chairman NCLAT) and Barun Mitra (member technical) allowed the withdrawal of the application, putting an end to the corporate insolvency resolution process at McLeod.

“The bench heard the matter, took note of the settlement reached between the promoters of McLeod and IL&FS IDF and allowed the appeal to be withdrawn. Once I get the order, I will hand the company back to the promoters,” Ritesh Prakash Adatiya, interim resolution professional (IRP) for McLeod, said this evening.

It is not clear, in the absence of the order, whether IRP has to follow up on the withdrawal application filed before the National Company Law Tribunal, Calcutta. “It would depend on the order passed by the NCLAT on Monday,” sources said.

Legalese aside, the development at the appellate tribunal means that the Khaitan family would be back in charge of India’s leading bulk tea producer, warding off the threat of insolvency once again. This is second instance when they managed to bring McLeod back from CIRP in as many years.

The fine print of the settlement is kept under the wraps but sources suggested IL&FS IDF may have been able to extract the entire principal outstanding from the promoters. The deal involves about Rs 50 crore in cash payment and transfer of land worth about Rs 200 crore, sources added.

The insolvency case pertains to a Rs 252.66-crore loan that IL&FS IDF had lent to two of the holding companies of the Khaitan family viz. Babcock Borsig Ltd and Williamson Magor & Co Ltd in 2017.

McLeod had executed a ‘‘shortfall undertaking’’ in favour of IL&FS Infra Debt Fund in relation to the loan. The two promoter group companies had defaulted in servicing the debt obligations, leading IL&FS to file a petition against the tea producer under section 7 of IBC.

The Calcutta bench of the NCLT sent the company to CIRP on February 10. Aditya Khaitan, chairman of the company, moved an application before the NCLAT seeking stay on CIRP. While the appellate tribunal stayed CIRP, it kept IRP in charge of the company.

Now that McLeod is effectively out of CIRP, the spotlight will again be on the long pending debt restructuring with the banks who proposed a one-time settlement of the dues worth Rs 1,600 crore.

Before McLeod was sent to CIRP, it had entered into exclusive talks with Carbon Resources to jointly explore the OTS with baks.

It is likely that those negotiations would start afresh. However, the promoters have to settle with a few other creditors such as KKR before the debt settlement with banks can go ahead.