The Mumbai Bench of the NCLT has directed commencement of corporate insolvency resolution process for EPC Constructions India Pvt Ltd, formerly known as Essar Projects (India) Ltd, on a petition filed by IDBI Bank to recover outstanding loans of ₹969 crore.

As per the submissions made by IDBI Bank before the Tribunal, the account of EPC Constructions, which executes engineering, procurement and construction projects, was declared a non-performing asset on December 31, 2014 under RBI guidelines.

This is the second Essar Group firm to face insolvency proceedings after Essar Steel. Essar Group was earlier under a debt pile of nearly ₹1.4 lakh crore, of which it has paid ₹80,000 crore with the sale of Essar Oil and other assets, including real estate.

After going through the pleadings on record and submissions made by the lenders, NCLT Member MK Shrawat noted that the financial creditor has duly sanctioned and disbursed the various loan facilities.

IDBI Bank said it had issued a demand letter to the debtor on November 8, 2017 demanding the outstanding amount, but the debtor still failed to repay it.

Further, IDBI Bank had issued a letter in December 2017 calling upon the corporate guarantor of the rupee term loan to pay the same. Further, another letter was issued by the financial creditor, calling upon the corporate guarantor of the working capital loan to pay the amount. But both the guarantors also failed to make payment to the financial creditor, said the bank.

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