The Chennai bench of the National Company Law Tribunal (NCLT) has ordered commencement of corporate insolvency resolution process against VA Tech Wabag, one of the pure play water technology majors. The process, initiated by Consolidated Construction Consortium (CCCL), a Chennai-based player in the construction and contracts of civil sector projects, was accepted by the NCLT after hearing both the parties.
The NCLT has appointed Pathukasahasram Reghunathan Raman as interim resolution professional (IRP) to carry out the proceedings within the stipulated time of 180 days. Sources said both the parties had a contractual dispute in terms of payment amounting to Rs 1.5 crore and CCCL had sought resolution of payment default through IRP.
The NCLT bench of Ch. Mohd. Sharief Tariq, member, judicial and S Vijayaraghavan, member technical had given VA Tech Wabag (corporate debtor) 15 days’ time on September 14 to settle the dues along with the interest with CCCL (operational creditor), when the bench pronounced a detailed order holding the case fit for insolvency process.
The bench, giving an opportunity to VA Tech Wabag, however, had made it clear that it will consider the case for admission, if the company failed to settle the outstanding amount.
When the matter came up on October 6, VA Tech Wabag counsel informed the bench that the corporate debtor was admittedly willing to pay only 50% of the principal amount and not willing to pay any interest. With CCCL counsel opposing the submission, NCLT ordered admission of VA Tech Wabag into the insolvency process.
The bench observed the default by debtor in making payment to the creditor was established and further fortified by the company’s admission to pay 50% of the principal amount, which CCCL refused to accept.
The IRP has been directed to take charge of the corporate debtor’s management immediately. It has also declared the moratorium which shall have effect from the date of the order till completion of the process. VA Tech Wabag officials were not immediately available for a comment.
Chennai-headquartered VA Tech Wabag, a listed company, is considered as an Indian multinational player in water and water treatment and recycling. It had recently won a Rs 386-crore design, build and operate order from the Bangalore Water Supply and Sewerage Board (BWSSB) for a 150 MLD sewage treatment plant (STP) at K&C Valley in Bengaluru.