The National Company Law Tribunal (NCLT) has admitted an insolvency petition against Bhilai Jaypee Cement, a subsidiary of Jaiprakash Associates Limited (JAL), for a default amounting to ₹45 crore.
The order was issued by the Cuttack bench of the tribunal, following a plea filed by the company’s operational creditor, Sidhgiri Holdings Pvt. Ltd., which had supplied coal to Bhilai Jaypee Cement.
In its ruling, the two-member bench comprising Judicial Member Deep Chandra Joshi and Technical Member Banwari Lal Meena held that the company had defaulted on an operational debt under Section 9 of the Insolvency and Bankruptcy Code (IBC).
The tribunal consequently directed the initiation of the Corporate Insolvency Resolution Process (CIRP) against Bhilai Jaypee Cement and appointed an interim resolution professional (IRP) to take charge of the company’s management.
The NCLT also imposed a moratorium, protecting the company from asset sales, debt recovery actions, or legal proceedings during the resolution process.
“We are inclined to hold that there exists an outstanding operational debt, a default and accordingly the present application under Section 9 of the Code read with Rule 6 of the Insolvency & Bankruptcy Rules, 2016 for initiating CIRP of Bhilai Jaypee Cement is allowed and the corporate debtor is admitted,” the bench stated in its order.
The insolvency petition was triggered after Bhilai Jaypee Cement allegedly failed to clear dues worth ₹45.40 crore owed to Sidhgiri Holdings against coal supplies made between September 2021 and June 2022.
The operational creditor claimed that the cement company had placed three purchase orders for 2,000 metric tonnes of coal each, amounting to 6,000 metric tonnes in total. As per the agreement, payment was to be made within 15 days of each delivery.
However, the company reportedly made only part payments and failed to settle the full amount despite repeated reminders.
On June 22, 2024, Sidhgiri Holdings issued a statutory demand notice under the IBC for the unpaid dues, which included ₹30.08 crore as the principal amount and ₹15.32 crore as accrued interest at 24 percent.
Receiving no response, the company subsequently moved NCLT to initiate insolvency proceedings.
In its defense, Bhilai Jaypee Cement argued that the petition was filed with the intent of recovering dues rather than resolving insolvency and that it was financially solvent.
The company also contended that the petition lacked supporting documentation, such as bank confirmations and ledger details.
However, the tribunal rejected these arguments, noting that Bhilai Jaypee Cement had neither disputed the coal supply nor the genuineness of the invoices.
The tribunal further added that the debt’s existence was established through the invoices and supporting GST documentation submitted by Sidhgiri Holdings.
Bhilai Jaypee Cement is a joint venture between Jaiprakash Associates Limited and Steel Authority of India Limited (SAIL), formed to operate a cement manufacturing unit in Chhattisgarh.
Its parent entity, JAL, is already undergoing insolvency proceedings under IBC. Vedanta Group has reportedly submitted the winning resolution plan worth ₹17,000 crore for JAL, outbidding the Adani Group.
The admission of Bhilai Jaypee Cement into insolvency adds another layer of complexity to the Jaiprakash Group’s ongoing financial distress, as multiple subsidiaries continue to face legal and debt resolution proceedings.
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