NCLAT dismisses BHEL's pleas against REC over insolvency of Hiranmaye Energy

Insolvency appellate tribunal NCLAT on Monday set aside a BHEL petition seeking to halt REC from initiating insolvency proceedings against Hiranmaye Energy, formerly India Power Corp (Haldia).

The NCLAT said it sees no reason to interfere in the order passed by the Kolkata bench of NCLT admitting REC's insolvency plea against Hiranmaye Energy, and said claims filed by BHEL against the debt-ridden thermal power company should be dealt with in accordance with the law.

The National Company Law Tribunal (NCLT) on January 2, 2024, directed to initiate a Corporate Insolvency Resolution Process (CIRP) against Hiranmaye Energy, admitting the plea filed by REC, formerly known as Rural Electrification Corporation.

Challenging this, BHEL moved the appellate tribunal NCLAT, where it filed two petitions. In the first plea, it challenged the admission of insolvency plea by the NCLT and also the order of January 5, 2024, in which PSU's intervention application filed by it was rejected.

BHEL contended that an award was granted in its favour by the Calcutta High Court on May 20, 2022, which has been put for execution. In this, an interim injunction has already been granted by the high court.

However, after the admission of the insolvency plea filed by REC under section 7 of the IBC as the financial creditor, this will cause prejudice to BHEL.

The National Company Law Appellate Tribunal (NCLAT) did not agree with the submissions of BHEL and said that the application under Section 7 was filed by REC in 2021, where the award was in its favour granted on May 20, 2022.

"The application was filed by REC Ltd and has been admitted by the impugned order dated January 2024. It is always open for the Appellant (BHEL) to file its claim in the CIRP of the Corporate Debtor (Hiranmaye Energy)," it said.

A three-member bench of the appellate tribunal also noted that BHEL has already submitted claims before the resolution professional of Hiranmaye Energy. "We see no reason to interfere with the impugned orders. Both the Appeals are dismissed," said the NCLAT.