Has NCLT Initiated Insolvency Proceedings Against Bhilai Jaypee Cement for a Rs 45 Crore Default?
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Synopsis
The NCLT has taken a decisive step by initiating insolvency proceedings against Bhilai Jaypee Cement, a subsidiary of Jaiprakash Associates, over a significant Rs 45 crore default. This critical move raises questions about the financial stability of the cement giant and its future operations.
Key Takeaways
- The NCLT has ordered insolvency proceedings against Bhilai Jaypee Cement.
- The company defaulted on payments totaling Rs 45 crore to a supplier.
- The petition was initiated by Sidhgiri Holdings for unpaid coal supplies.
- An Interim Resolution Professional has been appointed to oversee the company's operations.
- Bhilai Jaypee Cement's parent company is also in insolvency proceedings.
New Delhi, Oct 22 (NationPress) The National Company Law Tribunal (NCLT) has mandated the initiation of insolvency proceedings against Bhilai Jaypee Cement, a subsidiary of the financially troubled Jaiprakash Associates Limited (JAL), due to a failure to settle dues amounting to Rs 45 crore owed to a supplier.
The Cuttack bench of the NCLT issued the order after accepting a petition from Sidhgiri Holdings Private Limited, which had provided coal to Bhilai Jaypee Cement.
The cement company reportedly fell short on payments for coal acquired between September 2021 and June 2022.
Sidhgiri Holdings delivered coal under three distinct purchase orders, each for 2,000 metric tonnes, totaling 6,000 metric tonnes.
Per the agreement, Bhilai Jaypee Cement was to make payments within 15 days of delivery; however, only partial payments were made.
On June 22, 2024, Sidhgiri issued a statutory demand notice claiming Rs 45.40 crore, which consisted of Rs 30.08 crore as principal and Rs 15.32 crore as interest at a rate of 24 percent per annum.
After receiving no reply from Bhilai Jaypee Cement, the supplier petitioned the NCLT under Section 9 of the Insolvency and Bankruptcy Code (IBC), which permits operational creditors to initiate insolvency proceedings against defaulting companies.
Bhilai Jaypee Cement contested the petition, asserting that it remains solvent and that the petition was merely an attempt to recover funds rather than a genuine insolvency resolution.
The company also claimed the absence of adequate documentation, such as invoices, e-way bills, and bank statements.
However, the NCLT bench, comprising Members Deep Chandra Joshi and Banwari Lal Meena, rejected the company’s arguments.
The tribunal noted that there was no dispute regarding the coal deliveries or the invoices provided by Sidhgiri Holdings.
It also highlighted that the cement company had not disputed the existence or the amount of the debt.
“The existence of debt is clearly established by the invoices, and the company has not denied receiving them,” stated the tribunal in its ruling.
The NCLT dismissed the company’s reference to Section 63 of the BSA, 2023, deeming it irrelevant in this context.
An Interim Resolution Professional (IRP) has been appointed to oversee Bhilai Jaypee Cement.
The company’s board has been suspended, and a moratorium has been imposed on all legal actions and asset sales, in accordance with IBC regulations.
It is noteworthy that Bhilai Jaypee Cement’s parent company, Jaiprakash Associates Limited, is already under insolvency proceedings.
Point of View
It is evident that the financial challenges facing Bhilai Jaypee Cement reflect broader issues within the industry. As the National Editor-in-Chief at NationPress, we uphold the integrity of our reporting, emphasizing that such developments warrant close scrutiny and could signal significant shifts in corporate governance and operational accountability. Our commitment is to provide transparent and factual coverage, ensuring our audience is well-informed.
NationPress
22/10/2025
Frequently Asked Questions
What led to the NCLT's decision against Bhilai Jaypee Cement?
The NCLT ordered insolvency proceedings due to Bhilai Jaypee Cement's failure to pay dues of Rs 45 crore to Sidhgiri Holdings, which supplied coal to the company.
What is the significance of this ruling?
This ruling highlights the financial instability of Bhilai Jaypee Cement and raises concerns over its operational future as the company faces insolvency proceedings.
Who filed the petition against Bhilai Jaypee Cement?
The petition was filed by Sidhgiri Holdings Private Limited, the supplier of coal to Bhilai Jaypee Cement.
What are the implications of the NCLT's decision?
The NCLT's decision leads to the suspension of Bhilai Jaypee Cement's board and the appointment of an Interim Resolution Professional to manage the company's affairs.
Is Bhilai Jaypee Cement's parent company also facing insolvency?
Yes, Jaiprakash Associates Limited, the parent company of Bhilai Jaypee Cement, is already undergoing insolvency proceedings.
