The National Company Law Tribunal (NCLT) has ordered the initiation of insolvency proceedings against Bhilai Jaypee Cement, a subsidiary of debt-laden Jaiprakash Associates Ltd, following a default of INR450m (US$0.512m).
The Cuttack bench of the NCLT issued the direction after admitting a petition filed by operational creditor Sidhgiri Holdings Pvt Ltd, which supplied coal to Bhilai Jaypee Cement and was not paid for deliveries worth INR450 m.
A two-member NCLT bench, comprising Members Deep Chandra Joshi and Banwari Lal Meena, appointed an interim resolution professional (IRP) and suspended the company’s board of directors. The tribunal also imposed a moratorium under the Insolvency and Bankruptcy Code (IBC), preventing the sale or transfer of assets and halting ongoing legal proceedings against the company.
“We are inclined to hold that there exists an outstanding operational debt, a default and accordingly the present application under Section 9 of the Code read with Rule 6 of the Insolvency & Bankruptcy Rules, 2016 for initiating CIRP of Bhilai Jaypee Cement is allowed and the corporate debtor is admitted,” stated the NCLT bench.
Bhilai Jaypee Cement had been purchasing coal regularly from Sidhgiri Holdings. However, a dispute arose over three purchase orders for 2000t of coal each, totalling 6000t, between September 2021 and June 2022, leading to the creditor’s insolvency plea.
