Insolvency Proceeding Initiated Against Andhra Cements Ltd., A Jaypee Group Company: NCLT, Amravati
Pallavi Mishra
30 April 2022 7:33 PM IST
The National Company Law Tribunal ("NCLT"), Amravati Bench, comprising of Justice Telaprolu Rajani (Judicial Member), while adjudicating a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("IBC") in the matter of M/s Pridhvi Asset Reconstruction and Securitisation Company Ltd. v M/s Andhra Cement Ltd., has initiated Corporate Insolvency Resolution Process...
The National Company Law Tribunal ("NCLT"), Amravati Bench, comprising of Justice Telaprolu Rajani (Judicial Member), while adjudicating a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("IBC") in the matter of M/s Pridhvi Asset Reconstruction and Securitisation Company Ltd. v M/s Andhra Cement Ltd., has initiated Corporate Insolvency Resolution Process ("CIRP") against Andhra Cement Ltd. The order was passed on 26.04.2022.
Facts Of The Case
Andhra Cement Ltd. ("Corporate Debtor") is a part of Jaypee Group of companies and engaged in the business of cement manufacturing. The Corporate Debtor had approached IDFC First Bank Ltd., HDFC Ltd. and Karur Vysya Bank Ltd. for availing credit facilities for business use. The amounts were disbursed to the Corporate Debtor between 2012 to 2016. Edelweiss Asset Reconstruction Company Ltd. had acquired the loans disbursed by IDFC First Bank Ltd. and HDFC Ltd. and the underlying security interest held by these banks vide Assignment Agreements dated 22.03.2017 and 31.03.2021. Thereafter, Pridhvi Asset Reconstruction and Securitisation Company Ltd. ("Financial Creditor") had acquired loans to the extent of Rs. 804,72,79,210/- and underlying security interest held by Edelweiss and Karur Vysya Bank Ltd.
When the Corporate Debtor failed to meet its payment obligations, the Financial Creditor filed a Section 7 petition before NCLT, Amravati (Adjudicating Authority) seeking initiation of CIRP against the Corporate Debtor.
The Corporate Debtor in its Reply contended that due to inadequate working capital it was unable to operate the cement manufacturing plant to even 60% capacity, and accordingly it had requested the Financial Creditor for additional support to recommence the production. It was further submitted that there is no willful default on the part of the Corporate Debtor.
Decision Of The Adjudicating Authority
The Adjudicating Authority observed that there is an admission of debt and default and the reasons accorded by the Corporate Debtor cannot be considered within the IBC framework.
The Adjudicating Authority admitted the petition under Section 7 and initiated CIRP against the Corporate Debtor. Mr. Nirav Kirit Pujara has been appointed as the Interim Resolution Professional.
Case title: M/s Pridhvi Asset Reconstruction and Securitisation Company Ltd. v M/s Andhra Cement Ltd., CP (IB) No. 37/7/AMR/2022.
Counsel for Financial Creditor: Adv. P. Vikram.
Counsel for Corporate Debtor: Adv. Naveeni Jain.
