The Kolkata bench of the National Company Law Tribunal (NCLT) has admitted insolvency proceedings against West Bengal Mineral Development & Trading Corporation (WBMDTC), a government of West Bengal undertaking.
The Kolkata bench of the National Company Law Tribunal (NCLT) has admitted insolvency proceedings against West Bengal Mineral Development & Trading Corporation (WBMDTC), a government of West Bengal undertaking. WBMDTC, established by the state 45 years ago under special statute to secure and facilitate the growth of mining and mineral based industries and trading activities in Bengal, was referred to the bankruptcy court by Hiranmaye Energy, formarly known as India Power Corporation (Haldia), over unpaid dues.
Hiranmaye Energy, an operational creditor of the state government undertaking under the Commerce & Industries Department, filed the insolvency petition under Section 9 of the Insolvency and Bankruptcy Code (IBC) as the corporation had been unable to pay the outstanding debt of Rs 75 lakh to it.
The Kolkata-based operational creditor is an entity of India Power Corporation, which is a Kanoria Foundation entity. “The application filed by the operational creditor under Section 9 of the Insolvency & Bankruptcy Code, 2016 is hereby admitted for initiating the corporate resolution process in respect of West Bengal Mineral Development & Trading Corporation,” justice Madan B Gosavi said while passing the order on Monday.
As the operational creditor has not proposed any name for appointment as interim resolution professional, the bench has appointed Chandra Kumar Jain as the IRP of the insolvent corporation for ascertaining the particulars of creditors and convening a meeting of Committee of Creditors (CoC) for evolving a resolution plan.
Hiranmaye Energy’s counsel Rishav Banerjee had urged the bench to admit the insolvency petition against WBMDTC under Section 9 of the IBC. Banerjee argued on points of applicability of IBC to the corporation established by West Bengal under special statute in 1973.
WBMDTC had entered into a coal supply agreement in March, 2011 with Hiranmaye Energy, a power producer, and had agreed to supply the coal extracted from ‘B’ block Jagannathpur mining site. The state government undertaking had accepted Rs 75 lakh as security deposit from the operational creditor. But, by virtue of an order dated August 24, 2014, the Supreme Court, in case of Mantushil Shaw vs Union of India, had cancelled coal extract licence and WBMDTC was unable to supply the coal as agreed.
Following this, Hiranmaye Energy had requested the corporation to refund the security deposit. While giving a reply in May last year, the state government undertaking had admitted the liability and informed the operational creditor that the matter was taken up to the principal secretary of the state government’s Industry and Commerce Department.
After waiting for some months, the operational creditor sent a demand notice under IBC to the corporation on February 8, 2018. The power producer filed the insolvency petition against WBMDTC after the latter did not pay the amount despite repeated notices, according to the copy of the order passed by the tribunal on September 10.