Insolvency plea permitted against Supreme Infrastructure BOT
ECONOMY & POLICY

Insolvency plea permitted against Supreme Infrastructure BOT

After Supreme Infrastructure BOT failed to make loan repayments, SREI Infrastructure Finance filed a petition with the National Company Law Tribunal (NCLT) to start a corporate insolvency resolution procedure (CIRP) against the company. The petition was accepted. Supreme Infrastructure BOT was the recipient of a Rs 1.50 billion five-year term loan from SREI Infrastructure Finance. The loan was meant to be used for initiatives related to infrastructure. A number of security documents were then signed by the parties involved. But in August 2018, the borrower's noncompliance with loan repayments forced the financial creditor to return the loan.

In their representation of SREI Infrastructure, attorneys Rohit Gupta and Ativ Patel of AVP Partners contended that Supreme Infrastructure India Ltd. (SIIL), not the borrower, was the intended beneficiary of the intercreditor agreement (ICA) from June 2019. Furthermore, the ICA was only good for 180 days, yet throughout that time, no agreement was made.

According to the requirements of the Insolvency and Bankruptcy Code, the borrower had argued that the financial creditor is going through an insolvency procedure of its own. As a result, the lender's account has been deemed fake, and as a result, it is no longer permitted to pursue the bankruptcy claim against Supreme Infrastructure BOT.

The tribunal made it clear that even while they were subject to CIRP, the financial creditor was still able to file and prosecute claims against the corporate debtor.

Further, it rejected the corporate debtor's plea that the existence of an arbitration clause in the loan agreement should bar the financial creditor from approaching the tribunal, citing the Supreme Court's precedent in an earlier matter.

After Supreme Infrastructure BOT failed to make loan repayments, SREI Infrastructure Finance filed a petition with the National Company Law Tribunal (NCLT) to start a corporate insolvency resolution procedure (CIRP) against the company. The petition was accepted. Supreme Infrastructure BOT was the recipient of a Rs 1.50 billion five-year term loan from SREI Infrastructure Finance. The loan was meant to be used for initiatives related to infrastructure. A number of security documents were then signed by the parties involved. But in August 2018, the borrower's noncompliance with loan repayments forced the financial creditor to return the loan. In their representation of SREI Infrastructure, attorneys Rohit Gupta and Ativ Patel of AVP Partners contended that Supreme Infrastructure India Ltd. (SIIL), not the borrower, was the intended beneficiary of the intercreditor agreement (ICA) from June 2019. Furthermore, the ICA was only good for 180 days, yet throughout that time, no agreement was made. According to the requirements of the Insolvency and Bankruptcy Code, the borrower had argued that the financial creditor is going through an insolvency procedure of its own. As a result, the lender's account has been deemed fake, and as a result, it is no longer permitted to pursue the bankruptcy claim against Supreme Infrastructure BOT. The tribunal made it clear that even while they were subject to CIRP, the financial creditor was still able to file and prosecute claims against the corporate debtor. Further, it rejected the corporate debtor's plea that the existence of an arbitration clause in the loan agreement should bar the financial creditor from approaching the tribunal, citing the Supreme Court's precedent in an earlier matter.

Next Story
Real Estate

The Only Way is Up!

In 2025, India’s real-estate market will be driven by a confluence of economic, demographic and policy-driven factors. Among these, Boman Irani, President, CREDAI National, counts rapid urbanisation, the rise of the middle class, policy reforms like RERA and GST rationalisation, and the Government’s decision to allow 100 per cent FDI in construction development projects (including townships, housing, built-up infrastructure, and real-estate broking services).In the top metros, especially Bengaluru, followed by Hyderabad and Pune, the key drivers will continue to be job creation a..

Next Story
Building Material

Organisations valuing gender diversity achieve higher profitability

The building materials industry is projected to grow by 8-12 per cent over the next five years. How is Aparna Enterprises positioning itself to leverage this momentum and solidify its market presence?The Indian construction and building materials industry is projected to witness significant expansion, with estimates suggesting an 8-12 per cent compound annual growth rate (CAGR) over the next five years. This growth is fuelled by rapid urbanisation, increased infrastructure investments and sustainability-focused policies. With India's real-estate market expected to reach $ 1 trillion by 2030, t..

Next Story
Real Estate

Dealing with Delays

Delays have beleaguered many a construction project in India, hampering the country from building to its ability and potential, and leading to additional costs incurred by the contractor. The reasons for delayIn India, delays mainly occur owing to obtaining statutory approvals, non-provisioning of right of way, utility diversion and approval of drawings and design. Delays are broadly classified based on responsibility and effect. Excusable delays arise from factors beyond the contractor’s control, such as force majeure events or employer-induced delays. These delays generally entitle th..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?