Hyderabad High Court stays Insolvency proceedings against Anrak Aluminium
The joint venture between the Penna group and UAE’s RAKIA has challenged the petition, arguing that it had already entered into a onetime settlement with its lenders’ forum.
The joint venture between the Penna group and UAE’s Ras Al Khaimah Investment Authority (RAKIA) has challenged the petition, arguing that it had already entered into a onetime settlement with its lenders’ forum and paid the instalments as agreed. Therefore, the loan account cannot be technically considered non-performing to initiate proceedings under the Insolvency and Bankruptcy Code, it contended.
Anrak has also contested the directives issued by the Reserve Bank of India to SBI on December 27 to initiate insolvency proceedings, saying that it was initiated “without application of mind and without considering the fact that a resolution plan was already in place and was being implemented before December 13, 2017”.
While challenging the jurisdiction and authority of the banking regulator, Anrak submitted to the high court that the provisions of Section 35-A of the Banking Regulation Act only empowered the RBI to issue general directions.
The company said such power would not extend to taking up specific case and directing a “bank to undertake a specific exercise in a specific manner against a specific borrower or person”.
Anrak told the court that though it readied the alumina refinery project on schedule by March 2013 with financial assistance from the SBI-led consortium of lenders, it could not commence operations for want of the key raw material: bauxite. The Andhra Pradesh Mineral Development Corporation, which had agreed to supply bauxite through an agreement dated October 30, 2008, based on which the government-to-government alumina project was initiated, had gone back on its assurances, affecting the plant’s commercial operations.
The company said it explored various means including scouting for investors to clear the dues of the lenders’ consortium after the project monitoring group of the Prime Minister’s Office identified the venture as a ‘stalled project’.