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Informist, Wednesday, Feb. 25, 2026

 

--NCLAT asks IDBI Bank to file plea for withdrawing IBC case against HIL 

--CONTEXT: NCLT admitted IDBI Bank's insolvency plea against HIL (India) 

 

NEW DELHI – The National Company Law Appellate Tribunal Wednesday asked IDBI Bank to file an application for withdrawing insolvency case against HIL (India) Ltd., a government of India enterprise, in view of settlement between the parties. This application will be filed under Section 12A of the Insolvency and Bankruptcy Code, 2016, which allows for the withdrawal of an insolvency petition against a corporate debtor with the approval of at least 90% of the committee of creditors in cases admitted, said the appellate tribunal. 

 

In 2024, 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. 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. 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, Raju said. 

 

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. In 2018, a debt recovery tribunal issued a recovery certificate to the bank against both Southern Pesticides and HIL (India). 

 

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 1152 IST, shares of IDBI Bank were up 0.2% at INR 113.35 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 Vandana Hingorani

 

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