Private power producer Ind Bharath Group has filed an insolvency petition against the State’s power utility Tamil Nadu Generation and Distribution Corporation (Tangedco) for non-payment of dues of over ₹700 crore under the Insolvency and Bankruptcy Code, 2016.
This is the first time the insolvency route has been used to recover non-payment of dues from a State-owned enterprise and corporate lawyers view the proceedings in this case would be keenly watched.
Ind Bharath Group’s three arms Arkay Energy (Ramewswaram Ltd), Ind Bharath Power Gencom and Ind Bharath Thermal Power Ltd which have supplied power to Tangedco have approached the National Company Law Tribunal (NCLT) Chennai Bench for relief.
They have filed the case under Section 9, Rule 6 of the Insolvency and Bankruptcy Code, 2016, to recover dues totalling ₹720.54 crore, including principal and interest for the period between May 2011 and May 2016.
Ind Bharath also cited that its own creditors are seeking repayment and is fighting cases filed by its creditors demanding repayment. However, the firm claimed its funds are locked with Tangedco.
NCLT has given a week’s time for Tangedco to file its counter.
The three companies operate their power projects in Thoothukudi. Arkay Energy operates a 150 MW gas-based power plant; Ind Bharath Power Gencom has a 3x63 MW thermal plant; and Ind Bharath Thermal a 2x150 MW thermal plant.
Earlier this year, Tangedco had joined the Centre’s UDAY scheme, designed for restructuring and turnaround of discoms. Ind Bharath also noted that Tangedco had projected a profit of Rs. 2000 crore for 2017-18 after joining the UDAY.
Tangedco has for the first time in recent years projected a profit of ₹2,000 crore for 2017-18, after joining the scheme which would enable them to be in a position to repay the dues, Ind Bharath claimed.
“The developments in this case would be keenly watched as for the first time a state owned company is put to test by an operational creditor under insolvency code,” said Anant Merathia, a Chennai-based corporate lawyer.
