The court dismissed the company’s claims that with the GVK Power resolution plan that passed through the debt had been extinguished. | Photo credit: Andrew Kelly
Hyderabad Bench, of the National Company Law Court, has allowed insolvency processes against GVK Energy, after a request presented by lender Idbi Bank.
GVK Energy, a GVK Power & Infrastructure subsidiary, was a corporate guarantor of the debt incurred by GVK Power for a thermal energy project on Punjab.
As part of a consortium, IDBI had an extended term loan or around ₹ 734 million rupees and working capital of ₹ 154 million rupees to GVK Power, which breached by paying the loan and in 2018 the account was declared an asset without performance.
In 2022, another lender Axis Bank had initiated insolvency procedures against the corporate debtor. According to a resolution plan, IDBI received ₹ 306 million rupees against admitted claims of 1,413 million rupees. With the ₹ 1,107 million remaining rupees still pending, IDBI exercised its right to recover it from the guarantor, despite the resolution of the main borrower.
In its ruling, the NCLT said that non -compliance demanded the minimum threshold of ₹ 1 crore and that insolvency and bankruptcy code provide for the start of bankruptcy procedures a corporate guarantor.
The court dismissed the company’s claims that with the GVK Power resolution plan that passed through the debt had been extinguished.
NCLT appointed Venkata Chalam Varanasi as the professional of the interim resolution.
Posted on May 11, 2025