NCLT Bengaluru Dismisses Insolvency Plea Over Rs 428 Crore Claim Against Atria Group Firm

The National Company Law Tribunal (NCLT) at Bengaluru has dismissed an insolvency plea seeking to recover over Rs. 428 crore from Atria Group's renewable energy arm, Atria Brindavan Power.

The plea was filed by Piramal Capital and Housing Finance Limited and Omkara Assets Reconstruction Private Limited. It said the case was about recovering money, not resolving insolvency.

A coram of Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada found that the insolvency process was being used as pressure tactic against a solvent company.

The tribunal observed that "it is only as a secondary, albeit independent remedy available, measure that the Insolvency petition has been filed, probably to arm-twist the corporate debtor to cough up money more than a fair intention to seek resolution. We need not reiterate that resort to IBC is not a venture for debt recovery.”

The dispute goes back to a debenture deal signed in December 2016. Under the arrangement, the financial creditors had committed to fund up to Rs. 750 crore in six tranches for Atria's renewable energy projects. In the end, they subscribed to only about two and a half tranches, amounting to roughly Rs. 242.5 crore. However, the lenders later alleged a default of Rs. 428.39 crore, claiming the payment became due in December 2023.

Atria contested the claim. It told the tribunal that the lenders' decision to stop funding the remaining tranches stalled its projects and affected cash flows. It argued that its repayment obligation stood affected because the creditors failed to honour their reciprocal promise to fully fund the facility. The company also pointed out that the lenders were already pursuing recovery through civil courts and enforcement of security.

The tribunal agreed that the dispute could not be decided in summary insolvency proceedings. It said the insolvency framework is meant for clear and undisputed defaults, not for complex contractual disputes involving a going concern. The bench also noted that Atria is a solvent company engaged in renewable energy projects linked to Central and State government agencies and that the lenders are already heavily secured through share pledges and first-priority charges.

Under these circumstances, the tribunal held that the debt could not be treated as without dispute and due and payable. The plea was dismissed. The creditors, however, were left free to pursue their claims through other civil remedies. 

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