NCLT admits J&K Bank's IBC plea against Himalayan Mineral Waters
Informist, Friday, Jun 7, 2024
By Surya Tripathi
NEW DELHI - The Allahabad bench of the National Company Law Tribunal has admitted a petition by Jammu & Kashmir Bank to start insolvency proceedings against Himalayan Mineral Waters Pvt Ltd for a total debt of 500.44 mln rupees. The tribunal has appointed Bhoopesh Gupta as the interim resolution professional of the company.
Himalayan Mineral Waters, a company involved in the manufacture of beverages, was a corporate guarantor for the credit facilities availed by Leel Electricals Ltd. Tata Consumer Products Ltd owns the Himalayan Natural Mineral Water and Tata Water Plus brands.
A bench of judicial member Praveen Gupta and technical member Ashish Verma ordered a moratorium against Himalayan Mineral
under Section 14 of the Insolvency and Bankruptcy Code, 2016. "...we are satisfied that the applicant/financial creditor (Jammu and Kashmir Bank) has proved the debt and the default, which is more than the threshold limit of one crore rupees (10 mln rupees) and hence, the application u/s (under section) 7 is found to be fit for initiation of the CIRP (corporate insolvency resolution process) against the corporate debtor (Himalayan Mineral)," said the tribunal.
In 2015, Leel Electricals had approached the bank to avail financial facilities. Therein, Himalayan Mineral had provided surety to the credit facilities given by the bank. Later, the bank alleged that Leel Electricals failed to make repayment of the outstanding amount and committed a breach of terms and conditions in respect of various documents executed.
The bank said even Himalayan Mineral failed to make the repayment of the outstanding liability under the contract of guarantee on account of default committed by Leel Electricals. In 2020, a loan recall notice was issued by the bank, seeking that Leel Electricals and Himalayan Mineral repay the due amount. Since Leel Electricals did not settle the remaining outstanding dues, the bank sent a guarantee invocation notice to Himalayan Mineral. On failure of payment by Himalayan Mineral, the bank moved the tribunal.
Opposing the bank's petition, Himalayan Mineral said Leel Electrical was already undergoing liquidation by a 2021 order where the bank had filed a claim of 391.75 mln rupees. Therefore, for the same set of claims, the same applicant cannot file an insolvency petition for an admitted claim. However, the tribunal said that in earlier judgements it is held that proceedings under insolvency cases can be initiated against both the principal borrower and corporate guarantor and there was no inhibition in proceeding against Himalayan Mineral, although proceeding against Leel Electrical under the insolvency petition was admitted.
Today, shares of Jammu & Kashmir Bank ended 1.4% higher at 121.15 rupees on the National Stock Exchange. End
