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Informist, Monday, Aug. 11, 2025

 

NEW DELHI – The National Company Law Appellate Tribunal on Monday asked HIL (India) Ltd.'s resolution professional to not take any further steps under the Insolvency and Bankruptcy Code, 2016, till the next date of hearing on Aug. 27. The appellate tribunal issued notices to creditor IDBI Bank Ltd. and HIL's resolution professional on a plea by the suspended director of the corporate debtor against admission of insolvency resolution process against it.

 

On Jul. 30, the Delhi bench of the National Company Law Tribunal had admitted IDBI Bank's plea to start insolvency proceedings against the public sector company HIL (India) for an unpaid amount of INR 296 million. The tribunal had appointed Rohit Sehgal as the interim resolution professional of HIL (India).

 

Challenging the Delhi tribunal's order, D.N.V. Srinivasa Raju, the suspended director of HIL, moved the appellate tribunal on Monday. Raju argued that the debt was time-barred and the Delhi tribunal had wrongly decided that IDBI Bank's plea was under the limitation period. The guarantee was given in the case by the Centre, and it had discussed ways and means to monetise the non-core assets of HIL, and the same statement was brought before the Delhi tribunal but was not considered by it, said Raju. 

 

The case has its genesis in the principal borrower, Southern Pesticides Corp. Ltd., availing credit facilities from IDBI Bank. After the loan agreement was signed between Southern Pesticides and IDBI Bank, HIL (India) in 1988 executed a deed of corporate guarantee in favour of the bank against the loan facilities availed by the principal borrower. 

 

Since Southern Pesticides could not adhere to the terms and conditions of the repayment schedule as per the loan agreement, its account was declared as a non-performing asset in 1994. Thereafter, the bank issued a legal demand notice to Southern Pesticides and HIL (India) and invoked the corporate guarantee through a letter. Thereafter, a debt recovery tribunal issued a recovery certificate to the bank against both Southern Pesticides and HIL (India) in 2018.

 

The bank said the balance sheet of HIL (India) for 2020-21 (Apr-Mar) reflected that the company had provided a guarantee in favour of IDBI Bank for securing a credit facility availed by Southern Pesticides. HIL (India) has acknowledged the debt and did not dispute the position of outstanding dues, said IDBI Bank. 

 

At 1322 IST, shares of IDBI Bank were down 0.4% at INR 89.94 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

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