Canara Bank’s ₹330 Crore Default Case: NCLT Admits Insolvency Plea.

NCLT Admits Canara Bank Plea Against KTPL Over ₹330 Crore Default

• NCLT’s Legal Verdict: Default Exceeds Statutory Threshold

• KTPL’s Defense: Alleging Lender Delays in Disbursement

• The Karanja Creek BOOT Project: A Vision Derailed

The National Company Law Tribunal has admitted Canara Bank’s insolvency petition against Karanja Terminal & Logistics Pvt. Ltd. (KTPL) over a ₹330.40 crore default. The loan account was declared an NPA in June 2021 after KTPL failed to honour its repayment terms despite a One-Time Restructuring plan. With this admission, the Corporate Insolvency Resolution Process (CIRP) has begun, and Vijay Pitambar Lulla has been appointed as the resolution professional to oversee debt recovery and restructuring.

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NCLT Admits Canara Bank’s Insolvency Plea Against KTPL Over ₹330 Crore Default

The National Company Law Tribunal (NCLT) has admitted Canara Bank’s insolvency petition against Karanja Terminal & Logistics Private Limited (KTPL). This decision commences the Corporate Insolvency Resolution Process (CIRP). The action follows a massive financial default of ₹330.40 crore. The tribunal appointed Vijay Pitambar Lulla as the resolution professional. He will now oversee the entire debt resolution process.

Canara Bank Reports ₹330.40 Crore NPA

Canara Bank filed its petition detailing a substantial financial debt. The default amounted to ₹330,40,24,498.23 as of August 30, 2024. This significant sum forced the bank to seek legal recourse under IBC 2016. The loan accounts were classified as a Non-Performing Asset (NPA) on June 11, 2021. This classification occurred after KTPL failed to honour its repayment obligations. The company had previously agreed to a One-Time Restructuring (OTR) plan.

Tribunal Verdict Confirms Default Exceeds Legal Threshold

The NCLT’s order confirmed KTPL committed a clear repayment default. The default amount was “well beyond rupees one crore.” This satisfies the minimum threshold under Section 4 of the IBC. The tribunal clarified that exact default quantification isn’t needed for admission. That duty falls to the resolution professional during CIRP. The fact of a substantial default was sufficient for admission.

KTPL’s Defense Blames Lenders for Project Delays

KTPL presented a defence shifting blame onto its lenders. The company claimed sanctioned facilities were never fully disbursed. It also alleged significant delays in debt disbursement by the lenders. These financing issues critically derailed its core infrastructure project. The stalled project impeded all anticipated revenue and cash flows. Consequently, KTPL contended the default wasn’t its fault.

The Karanja Creek Multipurpose Terminal Project

Karanja Terminal & Logistics was involved in a major infrastructure venture. Its project was earmarked for development at Karanja Creek, Uran. The plan involved a multipurpose terminal and ship-repairing facilities. This was planned on a “Build, Own, Operate and Transfer (BOOT)” basis. Necessary infrastructure and other facilities were part of this project. The Canara Bank loan was intended to fund this large-scale development.

Also Read: NRI Investment Fraud: ₹20,000 Crore Corporate Scam Exposed.

Understanding the Corporate Insolvency Resolution Process

The CIRP commencement imposes a moratorium on KTPL. This legal shield prohibits any new suits or proceedings against the company. It also prevents transfer of any company assets. The Insolvency Professional will take over management control. His primary task is verifying claims from all creditors. He will then attempt to rescue the company through resolution plans.

Implications for India’s Port Infrastructure Sector

This case highlights financial stress within infrastructure development. The failure of this scale has broader implications. It impacts crucial port infrastructure development in Maharashtra. The case underscores the IBC 2016’s critical role. The code provides a structured framework for financial distress. It aims to maximize asset value for all stakeholders.

The Path Forward for Karanja Terminal & Logistics

Focus now shifts to Insolvency Professional Vijay Pitambar Lulla. He will control KTPL’s operations and assets immediately. His duty involves publicly inviting claims from all creditors. A Committee of Creditors (CoC) will be formed to steer the process. The CoC will evaluate resolution plans from interested parties. The goal remains finding a new owner to revive the company.

This development marks a critical juncture for the company and its creditors. The outcome will be closely watched by banking and infrastructure sectors. All eyes are now on the resolution process to see if revival is possible. The case demonstrates IBC’s continuing evolution in handling complex defaults. It also shows banks’ increasing willingness to use legal mechanisms.