The National Company Law Tribunal (NCLT) has admitted the insolvency petition against Tamil Nadu-based Dharani Sugars and Chemicals Ltd. The insolvency petition was filed by Bank of India for non-payment of dues totalling ₹28.24 crore.
In its petition, Bank of India said the company had three integrated sugar plants with a combined crushing capacity of 10,000 tonnes a day, a co-generation plant with a capacity to generate 35 MW of power and a distillery with a capacity of 160 kilo litres a day.
Dharani Sugars had availed credit facilities from a consortium led by Bank of India for projects across Tamil Nadu. The account was declared a non-performing asset on October 31, 2018, and the dues had not been settled, Bank of India said.
In its response, the company said sugar industry in the State had been facing major challenges because of the vagaries of monsoon and government policies. The sugarcane availability too had been declining due to inadequate rainfall. As a result, its sugarcane crushing levels had continuously come down in the last five years, in line with the general decline faced by the sugar industry. Hence the company said it was not able to repay debt.
The NCLT said the consortium of lenders had not accepted the one-time settlement proposed by the company. It said the reasons cited by the company were not acceptable to delay the insolvency process.
Under the insolvency process, a maximum of 330 days is provided to find a way to revive the company. If no solution is found, then liquidation proceedings would be initiated against the company.
