NCLAT rejects BHEL's arguments against REC over the insolvency of Hiranmaye Energy

05 Mar 2024

The insolvency appellate tribunal NCLAT rejected BHEL's plea seeking to prevent REC from initiating insolvency proceedings against Hiranmay Energy, formerly India Power Corporation. The NCLAT said it doesn't see any reason to interfere with the order passed by the Kolkata bench of the NCLT admitting REC's insolvency plea against Hiranmaye Energy and said that BHEL's claims against the debt-ridden thermal power company should be dealt with according to the law.

On January 2, 2024, the National Company Law Tribunal granted admission to the petition filed by REC, formerly known as Rural Electrification Corporation, and directed it to initiate a corporate insolvency resolution process against Hiranmay Energy.

In order to contest this, BHEL proceeded to the appellate tribunal, NCLAT, where it filed two petitions. In the initial petition, the petitioner contested the admission of the insolvency petition by the NCLT and its decision dated January 5, 2024, which had rejected the intervention application submitted by the PSU. The Calcutta High Court handed down an award in its favor on May 20, 2022, according to BHEL, which is still pending execution. In this case, an interim injunction has already been given by the High Court.