Bhilai Jaypee Cement Faces NCLT Insolvency Over ₹45 Crore Default

The National Company Law Tribunal (NCLT) has admitted a petition to start insolvency proceedings against Bhilai Jaypee Cement Ltd, a subsidiary of Jaiprakash Associates Ltd, as per the news reports. The Cuttack bench passed the order after finding that the company had defaulted on payments worth ₹45 crore to its operational creditor, Sidhgiri Holdings Pvt Ltd.

Background of the Case

Sidhgiri Holdings supplied coal to Bhilai Jaypee Cement between September 2021 and June 2022 under three purchase orders of 2,000 metric tonnes each. The payments were to be made within 15 days of delivery. However, the cement company made only partial payments, leaving a significant amount unpaid.

Creditor’s Claim

Following the delay, Sidhgiri Holdings issued a demand notice on June 22, 2024, under the Insolvency and Bankruptcy Code (IBC). The total claim stood at ₹45.40 crore, which included ₹30.08 crore as principal and ₹15.32 crore as interest, calculated at 24% per annum. When no payment or response came from Bhilai Jaypee Cement, the creditor approached the NCLT under Section 9 of the IBC.

NCLT’s Observation

The NCLT bench, comprising Deep Chandra Joshi and Banwari Lal Meena, observed that Bhilai Jaypee Cement did not dispute the receipt of coal or the invoices raised by the supplier. The tribunal held that the existence of operational debt and default was established and admitted the company into the Corporate Insolvency Resolution Process (CIRP).

Next Steps Under IBC

Following the order, the tribunal appointed an interim resolution professional (IRP) to manage the company’s affairs. A moratorium has also been imposed, preventing any sale or transfer of assets and halting legal proceedings against the company during the process.

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Conclusion

Bhilai Jaypee Cement’s parent firm, Jaiprakash Associates Ltd, is already undergoing insolvency resolution. Vedanta Ltd has submitted a ₹17,000 crore bid for JAL, which was selected as the winning offer.

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