Chennai: The Chennai bench of National Company Law Tribunal’s (NCLT) has allowed insolvency resolution proceedings against founder and former MD of Orchid Pharma Ltd K Raghavendra Rao and his wife R Vijayalakshmi, the co-founder of the drugmaker, in their capacity as a personal guarantor for the company’s loans.
The proceedings come nearly six years after the company was transferred to Dhanuka Group through bankruptcy. The tribunal passed the order on October 16, 2026, and uploaded it to the NCLT website on October 27.
The order has initiated a separate process against Vijayalakshmi in the same order. According to the order, the demand including principle with interest and other penalties from Raghavendra and Vijayalakshmi is Rs 256.29 crore.
The order said that the personal guarantors failed to comply with debt payment even after giving facilities like cash credit, term loan facility, capital term loan facility and funded interest term loan.
The order further added that even after Dhanuka Group’s Dhanuka Laboratories Ltd took over the company in 2019 as the dues remained unpaid.
The creditors of Vijayalakshmi have been asked to submit resolution professional (RP) on or before December 4. Once the process is admitted, a moratorium applies to all of the guarantor’s debts.
The debtor then prepares a repayment plan with the resolution professional, and creditors vote on it. If no plan is approved, creditors can move for bankruptcy.
Rao was once among the best-known first-generation entrepreneurs in Indian pharma. He founded Orchid Chemicals & Pharmaceuticals on July 1, 1992, and in 2011 he received the Padma Shri. The company went into insolvency in 2017.
The NCLT accepted a petition by one of its lenders, Lakshmi Vilas Bank. The first resolution attempt failed: the NCLT annulled the plan by Ingen Capital. In the second round, NCLT approved Dhanuka’s resolution plan on June 25, 2019.
The NCLAT later set that approval aside, and the Supreme Court then reversed the NCLAT. Dhanuka Laboratories formally took control of the company on March 31, 2020.