NCLT admits Andhra Bank’s IBC petition against Lanco Thermal

In the present case, the IBC proceedings were initiated independently as per the RBI circular.

Published: 10th May 2019 09:50 AM  |   Last Updated: 10th May 2019 09:50 AM   |  A+A-

By Express News Service

HYDERABAD: In a setback to Lanco Thermal Power Private Limited Company, the Hyderabad bench of National Company Law Tribunal (NCLT) on Thursday admitted the petition filed by Andhra Bank under the Insolvency and Bankruptcy Code (IBC) against Lanco thermal. The bank filed the petition seeking to declare the said company as insolvent as it has failed to repay Rs 150 crore loan amount.

According to the petitioner’s counsel K Lakshmi Narasimha, Andhra Bank has given a corporate loan of about Rs 150 crore to Lanco thermal in  2015. In spite of several reminders, the company has failed to repay any of this amount and went on dodging the issue one pretext or the other. As there was no hope that the company would ever repay the said loan amount, the bank has filed the present petition.

Referring to the judgment in the case of Dharani Sugars and Chemicals Limited vs Union of India, Lakshmi Narasimha told the National Company Law Tribunal bench that the judgment would be applied to the cases where IBC proceedings were initiated by the financial creditors solely based upon the RBI circular.

In the present case, the IBC proceedings were initiated independently as per the RBI circular.
After hearing both sides, the tribunal bench comprising Ratakonda Murali, member judicial, rejected the contention of Lanco thermal that it was likely to revive its business and held that it was not a ground to dismiss the present case. It was a fit case to be admitted since the corporate debtor (Lanco thermal) has admitted the default and that the financial creditor has initiated these proceedings independent of RBI circular.

The bench admitted the petition and appointed Praveen Bansal as interim resolution professional to carry the functions as mentioned in the IBC.

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