IIFCL UK moves NCLT against Reliance Infrastructure arm over ₹1,745 cr dues

Lender seeks insolvency proceedings against Mumbai Metro One over alleged ECB default; NCLT flags limitation, Section 10A and other defects in the petition

India Infrastructure Finance Company (UK) Limited (IIFCL UK), the overseas arm of state-owned India Infrastructure Finance Company, has approached the National Company Law Tribunal (NCLT), seeking insolvency proceedings against Mumbai Metro One Private Limited (MMOPL) over alleged dues of about ₹1,745 crore.

 

MMOPL is controlled by Reliance Infrastructure. The petition, filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), relates to an alleged default on an external commercial borrowing (ECB) facility.

 

A Bench of Judicial Member Nilesh Sharma and Technical Member Sameer Kakar heard the matter on Wednesday.

 

IIFCL’s counsel told the tribunal that the total outstanding amount was around $182 million. On being asked for a break-up, he said the principal claim was approximately $56.35 million, with the remainder comprising interest. The lender identified April 1, 2018, as the date of default.

 

 

The lender relied on MMOPL’s balance sheets, which it said contained acknowledgements of the outstanding liability and the default. It also relied on a default recorded in National E-Governance Services Ltd (NeSL) Form C.

 

The tribunal, however, pointed to several defects in the petition and gave IIFCL UK seven days to rectify them.

 

One of the key issues was limitation. Since the alleged default dates back to April 2018, the Bench asked the lender to establish how the insolvency petition remained within the limitation period. IIFCL relied on subsequent acknowledgements of the debt in MMOPL’s balance sheets and one-time settlement (OTS) proposals, including one dated September 6, 2022.

 

The Bench directed IIFCL to submit a tabulated account showing how successive acknowledgements extended the limitation period.

 

The tribunal also questioned the inclusion of amounts that became due during the period covered by Section 10A of the IBC, which bars insolvency proceedings for specified defaults arising during the Covid-19 period.

 

The ECB was repayable through 60 unequal quarterly instalments. When the Bench asked whether instalments falling due during the Section 10A period had been excluded, IIFCL’s counsel conceded they had not been separately identified.

 

The Bench observed that dues covered by Section 10A could not be claimed in insolvency proceedings and indicated that the petition could be rejected if such amounts remained part of the claim.

 

Another defect concerned the currency of the claim. Although the debt was stated in US dollars, the Bench noted that Form 1 also requires the amount to be stated in Indian rupees. Counsel agreed to file an amended form. The tribunal further noted that NeSL Form C had been filed but Form D was missing.

 

The Bench issued notice to IIFCL UK under the first proviso to Section 7(5) of the IBC and allowed seven days to cure the defects. An additional affidavit and amended Form 1 may also be filed.

 

The matter will next be heard on October 12.

 

IIFCL also told the tribunal that about 10 per cent of the dues were paid in December 2022, after which no further payments were made.