NCLT Initiates Insolvency for Bhilai Jaypee Cement Over Rs 45 Crore Debt

The National Company Law Tribunal (NCLT) has ordered the initiation of insolvency proceedings against Bhilai Jaypee Cement, a subsidiary of the debt-ridden Jaiprakash Associates Limited, due to a Rs 45 crore default. The directive, issued by the Cuttack bench of NCLT, follows a plea from operational creditor Sidhgiri Holdings Pvt Ltd, to whom Bhilai Jaypee Cement owed the amount for coal supplies.

A two-member NCLT bench has appointed an interim resolution professional (IRP) and suspended the company's board, enforcing a moratorium against asset encumbrance through sales and lawsuits in accordance with the Insolvency & Bankruptcy Code (IBC). Despite Bhilai Jaypee Cement’s arguments disputing the plea's intent, NCLT found no challenge to the debt's existence or the invoices' legitimacy.

The cement company regularly purchased coal from Sidhgiri Holdings, with disputes arising over 6,000 metric tonnes between September 2021 and June 2022. Yet, the company only met part of its payment obligations, leading Sidhgiri to file under Section 9 of IBC after sending a statutory demand notice. Bhilai Jaypee's parent company JAL is also undergoing Corporate Insolvency Resolution Proceedings, with Vedanta recently submitting the highest bid.