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The National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Bhilai Jaypee Cement, a subsidiary of Jaiprakash Associates Limited (JAL), over an outstanding operational debt of INR 45 crore owed to Sidhgiri Holdings Pvt Ltd for coal supplied between September 2021 and June 2022. The tribunal admitted the Section 9 petition, appointed an interim resolution professional, and placed the company under a moratorium. The cement maker had made partial payments, but the supplier moved NCLT after repeated defaults, reflecting ongoing financial stress within JAL and its subsidiaries.
The National Company Law Tribunal (NCLT) has directed the initiation of insolvency proceedings against Bhilai Jaypee Cement, a subsidiary of the debt-laden Jaiprakash Associates Limited (JAL). This follows an operational creditor petition from Sidhgiri Holdings Pvt Ltd, claiming unpaid dues of INR 45 crore for coal supplied to the company between September 2021 and June 2022. Advertisement
The Cuttack bench of NCLT, consisting of Members Deep Chandra Joshi and Banwari Lal Meena, admitted the petition and appointed an interim resolution professional (IRP). The tribunal also suspended the company's board and placed it under a moratorium, restricting the sale or encumbrance of assets, civil suits, or any legal proceedings, in line with the provisions of the Insolvency & Bankruptcy Code (IBC).
The dispute arose from three purchase orders for a total of 6,000 MT of coal, each order for 2,000 MT. As per the agreements, payments were due within 15 days of delivery. Although Bhilai Jaypee Cement made partial payments, the supplier claimed the remaining principal of INR 30.08 crore and interest of INR 15.32 crore at 24% per annum remained unpaid. After receiving no response, Sidhgiri Holdings issued a statutory demand notice in June last year and subsequently filed a petition under Section 9 of the IBC.
Bhilai Jaypee Cement contested the petition, arguing that it was filed with a recovery intent and that the company was solvent. The cement maker also claimed the supplier failed to provide certificates from financial institutions confirming non-payment and supporting documents like invoices, GSTR forms, e-way bills, and bank statements.
The NCLT, however, noted that the company did not dispute receiving the coal or the authenticity of invoices. The tribunal highlighted that the debt's existence and its quantum were clearly established through invoices and accepted by Bhilai Jaypee Cement in its replies. GST invoices raised by the supplier were also undisputed. The tribunal ruled that the insolvency petition was valid, dismissing the company's arguments.
This development adds to the ongoing financial strain on Jaiprakash Associates Limited, which is already undergoing a Corporate Insolvency Resolution Process (CIRP). Vedanta has emerged as the winning bidder for JAL's assets with an offer of INR 17,000 crore, outbidding the Adani Group. The insolvency proceedings against Bhilai Jaypee Cement underline the broader financial challenges within the group and the cement industry.
Source: PTI
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