New Delhi: The National Company Law Tribunal (NCLT), while accepting Jammu and Kashmir Bank's plea for default in corporate guarantee given to LEL Electricals, has directed initiation of insolvency proceedings against Himalayan Mineral Waters.
The Allahabad bench of NCLT has also appointed Bhupesh Gupta as interim resolution professional (IRP) for the corporate insolvency resolution process (CIRP) of the Dehradun-based firm.
"We are satisfied that the applicant/financial lender (J&K Bank) has proved the debt and default are in excess of the limits... the application under Section 7 has been found fit to initiate CIRP .Corporate Debtor (Himalayan Mineral Waters),” the two-judge bench said in the order passed last Monday.
Jammu and Kashmir Bank, being the corporate guarantor for credit facilities availed by Leel Electricals, had claimed a default of Rs 50 crore against Himalayan Mineral Waters, engaged in the business of manufacturing beverages.Liel Electricals had sold its consumer durable business to Havells India in May 2017 for Rs 1,550 crore.
In April 2020, insolvency proceedings were initiated by NCLT against LiL Electricals on a petition by one of its operational creditors. Later, as a buyer was not found, NCLT passed the liquidation order in December 2021.
In 2015, a consortium arrangement led by State Bank of Bikaner & Jaipur (now State Bank of India) extended credit to Liel Electricals for working capital facilities of Rs 35 crore (fund-based) and Rs 15 crore (non-fund based). Facilities approved. ,
This was later increased to Rs 70 crore in 2017 and Himalayan Mineral Waters stood as surety for both the agreements.Later in 2017, when the borrower sold its consumer durables business to Havells India, it requested the financial lender to reduce the working capital limit to Rs 37 crore on a proportionate basis.
After not receiving any payment from the borrowers, the financial lender declared the credit facility account of the borrower as non-performing asset (NPS) as per the prudential norms issued by the Reserve Bank of India as on January 31, 2019.
The borrower offered one-time settlement (OTS), which was rejected by the lender.
Since the borrower did not pay the remaining dues, the financial lender sent a Guarantee Invocation Notice to all the guarantors, including Himalayan Mineral Waters, on February 12, 2020, requesting them to pay the dues.
The case was referred to NCLT, where Himalayan Mineral Waters argued that the working capital, consortium agreement and guarantee deed were executed by forming a consortium of banks with 12 banks and no individual bank was entitled to call the outstanding amount of the credit facility. Has no right.,
It argued that the consortium banks would form opinions and act collectively.
Rejecting this, the NCLT said that these arguments do not have 'merit' and there is a clear default on the part of the corporate debtor in paying the dues.
Accepting the petition, the NCLT said, "We are satisfied that the present application under Section 7 has been found fit to be admitted against the corporate debtor, M/s, Himalaya Minerals Water Pvt. Ltd. and accordingly, the stay is declared. Is." In terms of Section 14 of the I&B Code, 2016."
The Allahabad bench of NCLT has also appointed Bhupesh Gupta as interim resolution professional (IRP) for the corporate insolvency resolution process (CIRP) of the Dehradun-based firm.
"We are satisfied that the applicant/financial lender (J&K Bank) has proved the debt and default are in excess of the limits... the application under Section 7 has been found fit to initiate CIRP .Corporate Debtor (Himalayan Mineral Waters),” the two-judge bench said in the order passed last Monday.
Jammu and Kashmir Bank, being the corporate guarantor for credit facilities availed by Leel Electricals, had claimed a default of Rs 50 crore against Himalayan Mineral Waters, engaged in the business of manufacturing beverages.Liel Electricals had sold its consumer durable business to Havells India in May 2017 for Rs 1,550 crore.
In April 2020, insolvency proceedings were initiated by NCLT against LiL Electricals on a petition by one of its operational creditors. Later, as a buyer was not found, NCLT passed the liquidation order in December 2021.
In 2015, a consortium arrangement led by State Bank of Bikaner & Jaipur (now State Bank of India) extended credit to Liel Electricals for working capital facilities of Rs 35 crore (fund-based) and Rs 15 crore (non-fund based). Facilities approved. ,
This was later increased to Rs 70 crore in 2017 and Himalayan Mineral Waters stood as surety for both the agreements.Later in 2017, when the borrower sold its consumer durables business to Havells India, it requested the financial lender to reduce the working capital limit to Rs 37 crore on a proportionate basis.
After not receiving any payment from the borrowers, the financial lender declared the credit facility account of the borrower as non-performing asset (NPS) as per the prudential norms issued by the Reserve Bank of India as on January 31, 2019.
The borrower offered one-time settlement (OTS), which was rejected by the lender.
Since the borrower did not pay the remaining dues, the financial lender sent a Guarantee Invocation Notice to all the guarantors, including Himalayan Mineral Waters, on February 12, 2020, requesting them to pay the dues.
The case was referred to NCLT, where Himalayan Mineral Waters argued that the working capital, consortium agreement and guarantee deed were executed by forming a consortium of banks with 12 banks and no individual bank was entitled to call the outstanding amount of the credit facility. Has no right.,
It argued that the consortium banks would form opinions and act collectively.
Rejecting this, the NCLT said that these arguments do not have 'merit' and there is a clear default on the part of the corporate debtor in paying the dues.
Accepting the petition, the NCLT said, "We are satisfied that the present application under Section 7 has been found fit to be admitted against the corporate debtor, M/s, Himalaya Minerals Water Pvt. Ltd. and accordingly, the stay is declared. Is." In terms of Section 14 of the I&B Code, 2016."
