The State Bank of India (SBI) has filed a corporate insolvency petition against construction firm Jaiprakash Associates Limited (JAL) for a debt default of ₹6,892.48 crore.

The petition was filed before the Allahabad Bench of the National Company Law Tribunal (NCLT) on September 20. The date of debt default has been certified by NeSL as December 10, 2015.

Under the IBC

Jaiprakash Associates, a flagship firm of the debt-ridden Jaypee Group, was included in the Reserve Bank of India (RBI)‘s second list of 26 big loan defaulters against whom bankruptcy proceedings were initiated in August 2017. Subsequently, ICICI Bank had filed an insolvency petition in September 2018. The said matter has so far not been admitted and has been adjourned for the last four years, say legal experts, who point out that such adjournments have been unfairly delaying the resolution process.

JAL, which has a huge outstanding debt (estimated at about ₹26,000 crore), has been in talks with lenders for restructuring proposal outside the IBC, but without any success. Another Jaypee Group company, Jaypee Infratech, is already under the IBC process.

In Section 7 of the application for CIRP initiation, SBI has proposed to the court to appoint Bhuvan Madan as the interim insolvency professional for JAL. As many as 32 banks have exposure to JAL which include ICICI Bank, Axis Bank, Bank of Baroda, IDBI Bank and Canara Bank. .

It maybe recalled that Jaiprakash Associates (incorporated in 1995) came into existence in 2004 through the amalgamation of Jaiprakash Industries with Jaypee Cement. The combined entity was renamed as Jaiprakash Associates Ltd. JAL is engaged in cement manufacture, engineering and construction, expressways, real estate, hospitalities, wind/thermal power plants at various locations all over India.

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