HYDERABAD: The Hyderabad bench of the National Company Law Tribunal (NCLT) has recently permitted for commencement of insolvency proceedings against BS Limited, a construction company, which has failed to repay loans raised from the State Bank of India (SBI).
The SBI approached the NCLT with a plea to commence the Corporate Insolvency Resolution Process (CIRP) as the debtor company BS Limited has failed to repay the loans as per the agreement.
When the matter came up for hearing before the tribunal bench comprising judicial member K Anantha Padmanabha Swamy, the SBI counsel submitted that the bank has sanctioned `501 crore loan and entered into an agreement with the company in 2010. Later, further loans up to `1,540 crore were sanctioned in a phased manner to the company. The company has failed to repay loans as per the agreement. The company has to pay `924.88 crore till April this year. Besides, the bank sanctioned `37.17 crore as bank guarantee to others on behalf of the company. The company has to repay this amount if it has converted it into liquidity, he added.
On the other hand, the counsel for BS Limited said it was not proper for the SBI to file the present petition under the Insolvency and Bankruptcy Code even after filing a case before the Debts Recovery tribunal under the SARFAESI Act.
After hearing both sides, the bench did not consider the argument of the company. In fact, the company has not disputed with the complaint of the SBI with regard to debts. Besides, the company has not shown any reason against admitting the petition for hearing, the bench observed.
As the company has failed to repay the loans as per the agreement, the bench permitted for the commencement of insolvency resolution process of BS Limited and appointed Dr KV Srinivas as temporary insolvency resolution expert (IRP) for the purpose. While imposing ban on transactions and sale of properties of the company, including those mortgaged and were in court dispute, the bench directed the company directors and organizers to cooperate with the IRP.
Prior to issuance of above orders in the petition filed by SBI, the bench allowed the petition filed by BS Limited seeking insolvency resolution process of Vedika steels private limited. The BS Limited company used to supply material to Vedika steels, and the latter failed to clear the bills to a tune of `97.41 crore. After stopping supply of material this year, BS Limited company directors had made efforts for recovery of dues from Vedika steel.