Insolvency case cripples Kochi smart city functioning
An insolvency case filed by a private firm against smart city has almost stalled major functions of the smart city, including the conduct of its director board meeting. Though the SmartCity authorities informed the National Company Law Appellate Tribunal (NCLAT) that they would settle the dispute through reconciliation, they couldn’t successfully furnish the details of understanding reached upon with the private firm so that the case could be wound up.
All the issues came out of a dispute between SmartCity authorities over disbursal of funds to project management company (PMC) firm Synergy Property Development Services Private Ltd last year.
In 2015, there surfaced allegations that some of the officials of the SmartCity made financial irregularities in the purchase of materials like iron rods for the construction of the project building. Following this, the SmartCity authorities withheld part payment to Synergy Ltd stating that the PMC firm also was responsible for the loss. Then, the Synergy Ltd moved National Company Law Tribunal (NCLT), Chennai.
The NCLT Chennai admitted the arguments by Synergy and pronounced the verdict accordingly. SmartCity authorities challenged the verdict before NCLAT. Later, SmartCity authorities informed the appellate tribunal that they have reached upon an understanding with the private firm. Though the NCLAT asked the SmartCity authorities to furnish the details of understanding before September 21, the latter couldn’t successfully furnish the details.