NCLT orders insolvency proceedings against Bhilai Jaypee Cement over Rs 45 crore default

New Delhi: The National Company Law Tribunal (NCLT) has directed for initiation of insolvency proceedings against Bhilai Jaypee Cement, a subsidiary of debt-ridden group Jaiprakash Associates Limited, for a default of Rs 45 crore. The direction of Cuttack bench of NCLT came after it admitted a plea filed by the company's operational creditor Sidhgiri Holdings Pvt Ltd, to which Bhilai Jaypee Cement owed Rs 45 crore against supply of coal. A two-member NCLT bench also appointed an interim resolution professional (IRP), suspending the board of the company and putting it under the protection of moratorium against encumbrance of assets through sale, civil suits etc, as per the provisions of the Insolvency & Bankruptcy Code (IBC). "We are inclined to hold that there exists an outstanding operational debt, a default and accordingly the present Application... under Section 9 of the Code read with Rule 6 of Insolvency & Bankruptcy Rules, 2O16 for initiating CIRP of Bhilai Jaypee Cement is allowed and the corporate debtor is admitted," said NCLT bench comprising Members Deep Chandra Joshi and Banwari Lal Meena. Bhilai Jaypee Cement was regularly purchasing coal from its operational creditor Sidhgiri Holdings. However, a dispute arose from three purchase orders for 2,000 MT (metric tonne) of coal each, amounting to 6,000 MT between September 2021 and June 2022.

As per the purchase orders, the payment in respect of each one was to be made by Bhilai Jaypee Cement after 15 days of delivery. The supplier raised multiple invoices during the period and the cement maker only made a part payment of the demand. Finally, it sent a statutory demand notice on June 22, 2024 under IBC of a total amount of Rs 45.40 crore, in which Rs 30.08 crore was for the principal amount and Rs 15.32 crore interest at the rate of 24 per cent, claimed to be unpaid. After getting no response from the company, Sidhgiri Holdings moved NCLT, filing a petition under Section 9 of the IBC. Bhilai Jaypee Cement contested the insolvency plea against it before NCLT, contending that it has been filed with an intent of recovery and is in contravention of the objective of IBC as the respondent is a solvent company. Moreover, it has failed to provide any certificate from the financial institutions confirming non-payment of unpaid operational debt and the invoices, e-way bills, GSTR forms, ledger book maintained by the applicant, bank statement, etc. However, NCLT said the cement maker has not disputed the receipt of coal supplies and the genuineness of the invoices. "It is noted that no dispute whatsoever has been raised by the respondent in regard to the receipt of coal supplied by the applicant. The respondent has also neither disputed the genuineness of invoices brought on record by the applicant nor disputed the receipt of such invoices by it in its reply or oral submissions. The respondent has also neither disputed the existence of the debt nor the quantum of debt which is stated in Part-IV of the application," it said. Moreover, the GST invoice was raised by Sidhgiri Holdings in favour of Bhilai Jaypee Cement, which is also not disputed by the cement maker. "The existence of debt is clearly established by the copies of the invoices raised by the applicant, and the acceptance of the existence of debt on the part of the respondent in its reply makes the contention of the respondent about Section 63 of BSA, 2023, untenable," said NCLT while admitting the insolvency plea against Bhilai Jaypee Cement. Bhilai Jaypee Cement parent entity JAL is already going through CIRP (Corporate Insolvency Resolution Process), in which Vedanta has submitted the winning bid of Rs 17,000 crore, outbidding the Adani Group.