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Legal News by - KETAN ASAti (This News was written by him during his Internship)
To recover approximately Rs 16,000 crore of outstanding dues from GVK Power & Infrastructure Limited (GPIL), the Hyderabad bench of the NCLT has begun corporate insolvency resolution process under section 7 of the IBC, 2016 via a petition from ICICI Bank and other five banks.
A quorum of Judicial member Rajeev Bhardwaj and Technical member Sanjay Ouri passed an order stating – “We admit the application/petition under section 7 of IBC, subject to the conditions that the financial creditor shall pay the stamp duty as per table in para no. 13 of IA 374/2023 within 15 days. The moratorium is declared for the purposes referred to in section 14 of the code.”
Meanwhile, the 83-page court’s order said that GPIL has acknowledged its liabilities in its annual reports for the fiscals 2019, 2020 to 2021 and ICICI filed the petition when the corporate warranty was resorted and affirmed but could not meet the liabilities despite extending repeated assurances. It also held that it was not inclined to see any force in the arguments that GPIL put forth saying that the NCLT had no jurisdiction on the issue given that most of the loans were from a foreign branch. The loan was borrowed for GVK Coal Developers (Singapore) Pte limited over a decade ago for which GVKPIL stood as a guarantor for the same.
NCLT finally made an order referring and expediting process to appoint Satish Kumar Gupta as an interim resolution professional for managing the corporate debtor during the resolution process.
The timeline of the loans availed by GVKPIL for GVK coal is – The Senior Counsel for the ICICI is K Vivek Reddy who disclosed the judge’s ruling in the London court in October of last year that the first default was made in February 2017 and up to now no payment has been made by the corporate guarantor GVKPIL, which Company obtained the loan for GVK Coal and since GVK has not made any payment the procedure is to be followed by bankruptcy.
Legal action was started in London court in April, 2016 which sought the GVK group not to sell stakes in Bangalore International Airport Limited trapped in the agreements and an act against the rules and regulations without informing the lender. Hence when the going concern was unable to pay the loan, the lender banks had filed a claim in the court in London for 5915 crores and 1236 crores.
In November 2020, ICICI Bank called a corporate guarantee demand of Rs. 5000 crores on principal and interest from GVKPIL. GVKPIL, in its legal response, claimed it cannot make the payments but vowed to do so once it has a deal with the Adani group through, as stated in the order records, asking the bank not to act further. Nonetheless, ICICI Bank went to the NCLT in 2022 to present an application under section 7 of the IBC, 2016 with an aim to commence the corporate insolvency process.
The NCLT in its order on July 12, 2024 held that as of June 13, 2022 GVKPIL was deemed defaulted and its outstanding as of that date was Rs. 15,576 crores; which included Rs. 9436 crores towards principal and Rs. 6,113 crores towards interest and Rs. 1.23 crores in agency fees.
The order was passed by the NCLT bench at the earliest by July 12 and got more prominently published only on Monday. Originally this petition was filed in the year 2022 by the petitioner itself, here was the case.
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