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Informist, Thursday, Jun. 11, 2026

 

--NCLT admits Canara Bank's insolvency plea against RInfra arm HK Toll Road 

 

By Surya Tripathi

 

NEW DELHI – The Mumbai bench of the National Company Law Tribunal Thursday admitted a petition by Canara Bank to start insolvency proceedings against HK Toll Road Pvt. Ltd., a wholly-owned subsidiary of Reliance Infrastructure Ltd., for unpaid dues of INR 2.83 billion. The tribunal appointed Sanjay Kumar Mishra as the interim resolution professional of HK Toll Road to carry out the functions as per the Insolvency and Bankruptcy Code, 2016.

 

The defence raised by HK Toll Road is primarily premised on pendency of disputes with National Highways Authority of India and the alleged wrongful termination of the concession, which has impacted its revenue generation, the tribunal said. However, such disputes with third parties do not detract from the liability of HK Toll Road towards Canara Bank, it said. The scope of inquiry under an insolvency petition is limited to the ascertainment of the existence of debt and default, and the tribunal is not required to adjudicate upon collateral disputes or claims pending before other forums, it said. 

 

The tribunal declared a moratorium against HK Toll Road under Section 14 of the 2016 Code. Under the moratorium, the institution of suits or continuation of pending suits against HK Toll Road, and transfer or alienation of assets by the company is barred, the tribunal said. 

 

The National Highways Authority of India had shortlisted and selected Reliance Infrastructure Ltd. to implement a highway project in Tamil Nadu. For this, HK Toll Road was incorporated as a special purpose vehicle company with the main objective of implementing the project involving construction, operation, maintenance, strengthening and widening of a stretch of a national highway in Tamil Nadu. 

 

Thereafter, HK Toll Road approached Canara Bank along with other lenders for the purpose of part financing the project. Canara Bank, along with other lenders, sanctioned term loan facilities of INR 5.55 billion on the terms and conditions as per the sanction letters issued by the lenders with the bank's exposure of INR 3.10 billion.  

 

The highway project had achieved a provisional commercial operation date in 2016 and HK Toll Road had been meeting all its repayment obligations till August 2023. Thereafter, the highways authority issued a notice to the company and expressed its intention to terminate HK Toll Road, which followed litigation proceedings in the Delhi High Court. HK Toll Road committed default in its payment obligations and its loan account was classified as non-performing asset in 2024. 

 

The bank issued a loan recall notice to HK Toll Road. Despite various reminders to HK Toll Road, it has failed to pay the outstanding dues and repeatedly defaulted in complying with the terms of the sanction of credit facilities availed, said Canara Bank. Consequently, Canara Bank moved the tribunal to start insolvency proceedings against HK Toll Road.

 

On Thursday, shares of Canara Bank ended 1.5% lower at INR 131.52 on the National Stock Exchange.  End 

 

Edited by Avishek Dutta

 

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