NCLAT rejects plea to stay insolvency proceedings against Indrajit Power

The National Company Law Appellate Tribunal (NCLAT) has dismissed a plea to stay the insolvency proceedings against debt-ridden thermal power producer Indrajit Power.

The appellate tribunal said "no error has been committed" by the National Company Law Tribunal (NCLT), while admitting the plea to initiate insolvency proceedings against the Maharashtra-based company on February 1, 2024, filed by Yes Bank.

The said order passed by the Mumbai bench of NCLT was challenged by Rajiv Munjal, a director from the suspended board of Indrajit Power, before the NCLAT.

However, NCLAT upheld the NCLT order observing that it admitted the insolvency plea after finding debt and default which is not even questioned in the appeal filed by the suspended board.

"The submission of the appellant (director) that he proposes to enter into settlement, itself makes it clear that debt and default are admitted. In view of the aforesaid, we do not see any good grounds to entertain this appeal," said a two-member NCLAT bench on January 7, 2025.

Yes Bank, a financial creditor, has claimed a default of Rs 331.41 crore against Indrajit Power, which presently operates an 85 MW coal-based thermal power plant at Wardha, Maharashtra. Later, this loan was substituted by JC Flower Asset Reconstruction.

When the appeal was considered before NCLAT, Munjal submitted that he was taking steps to settle. NCLAT has granted several opportunities. The last opportunities were granted on October 1, 2024, and on November 5, 2024.

Even when the appeal was taken up last week on January 7, 2025, counsel for the appellant submitted that no settlement could be entered. Following this, the appellate tribunal moved ahead and dismissed the appeal.