State Bank of India has filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against KM Toll Road Private Ltd (KMTRPL), a wholly owned subsidiary of Reliance Infrastructure, before the National Company Law Tribunal, Mumbai, for a claim amount of ₹233.44 crore (including interest).
Reliance Infrastructure, in a regulatory filing, said KMTRPL will seek appropriate legal advice and take appropriate steps to protect its interest in the aforesaid matter.
The financial implication on the Company cannot be ascertained and is contingent upon the final outcome of the said proceedings and subsequent legal challenges, it added.
Section 7 of IBC deals with initiation of corporate insolvency resolution process (CIRP) by financial creditors.
Under the aforesaid Section, a financial creditor either by itself or jointly with other financial creditors, or any other person on behalf of the financial creditor, may file an application for initiating CIRP against a corporate debtor before the adjudicating authority when a default has occurred.
KMTRPL is one of the 60-odd subsidiary and associate companies (including joint ventures) within Reliance Infrastructure.
Reliance Infrastructure, in its latest annual report, noted that KMTRPL had terminated the Concession Agreement with National Highways Authority of India (NHAI) for Kandla-Mundra Road Project on May 7, 2019, on account of material breach and event of default under the provisions of the Concession Agreement by NHAI.
The company claimed that in terms of the provisions of the Agreement, NHAI is liable to pay termination payment to KMTRPL, as the termination was on account of NHAI’s event of default.
