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Informist, Wednesday, Feb. 18, 2026

 

--SC upholds IBC proceedings against Hiranmaye Energy, rejects promoter plea 

--CONTEXT: REC filed IBC plea against Hiranmaye Energy for INR 21.8-bln dues 

 

NEW DELHI – The Supreme Court Wednesday upheld admission of REC Ltd.'s insolvency plea against debt-ridden Hiranmaye Energy Ltd. for dues of INR 21.8 billion. The top court rejected Hiranmaye Energy's promoter Power Trust's plea to settle the case by paying INR 16 billion to REC and Power Finance Corp. Ltd., another creditor of Hiranmaye Energy. 

 

The Bench of Justice Joymalya Bagchi and Justice Vipul M. Pancholi lifted its earlier stay on insolvency proceedings against Hiranmaye Energy, through an order on Sept. 12, 2025. This means the Kolkata bench of the National Company Law Tribunal may go ahead with completing the corporate insolvency resolution process of Hiranmaye Energy and take a decision on Damodar Valley Corp.'s INR 15-billion resolution plan for the debt-ridden company. The top court asked its registry to return the INR 1.25 billion deposited by Power Trust as a condition for staying the insolvency proceedings against Hiranmaye Energy.

 

In 2013, Hiranmaye Energy had taken a loan of INR 18.59 billion from REC for a project for a thermal power plant at Haldia consisting of three units of 150 megawatt each. Due to cost overruns, in 2015, the parties entered into an amendment for an additional term loan facility of INR 4.47 billion. 

 

In 2018, REC classified the account of Hiranmaye Energy as a non-performing asset due to default by the latter in making payments. Hiranmaye Energy conducted several meetings with REC for restructuring of loans and accordingly, the former issued its approval for a restructuring plan, in which the repayment obligation and interest payments were to commence from 2020, within the period stipulated under Section 10A of the Insolvency and Bankruptcy Code, 2016.

 

Despite restructuring of the credit facilities, REC filed an insolvency petition against Hiranmaye Energy for default in payment of INR 21.83 billion dues, which was admitted wrongly by the Kolkata tribunal, said Power Trust. Power Trust said that Hiranmaye Energy, which had entered into power purchase agreements in 2010, 2018 and 2020 with West Bengal State Electricity Distribution Co. Ltd., was in the public service of supplying electricity to common consumers, and hence the action taken by the Kolkata tribunal was incorrect. The default period was squarely covered under Section 10A of the 2016 Code, and so the insolvency order was illegal and perverse, said Power Trust. REC has been playing hide and seek by way of accepting payments from the corporate debtor from time-to-time and simultaneously pursuing the insolvency case before the Kolkata tribunal, said Power Trust. 

 

In 2024, the National Company Law Appellate Tribunal dismissed Power Trust's plea, against which the company moved the apex court. Meanwhile, last year, Damodar Valley Corp. emerged as the top bidder with an INR 15-billion offer for Hiranmaye Energy. Power Trust had initially proposed INR 14.50 billion to settle the dues of REC and Power Finance Corp. within 90 days and promised to handle the remaining creditor payments separately. Later, Power Trust raised its offer to INR 16 billion, excluding the cash balance and trade receivables of Hiranmaye Energy on the transfer date, which it said would be released to secured financial creditors. 

 

At 1134 IST, shares of REC Ltd. were up 1.9% at INR 365.35 on the National Stock Exchange, and those of Power Finance Corp. Ltd. were up 1.2% at INR 421.80.  End

 

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

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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