The Hindu Business Line

Impact of SC ruling on RBI circular: Dighi port could slip out of JNPT’s hands

Negotiatio­ns between lenders and debtors have come to a halt: Dighi port chairman


Jawaharlal Nehru Port Trust’s (JNPT) plan to buy the debtladen Dighi Port Ltd could fizzle out after Tuesday’s Supreme Court’s order striking down the February 12, 2018 Reserve Bank of India (RBI) circular on stressed assets.

The RBI circular mandated banks to initiate insolvency proceeding­s against companies with debt of above ₹2,000 crore, in case the debt is not resolved within 180 days with the approval of 100 per cent (all) lenders.

Resolution process

In January, the committee of creditors, led by the Bank of India, approved the resolution plan submitted by JNPT for Dighi port which owes around ₹2,628.84 crore to a clutch of 16 banks. JNPT’s resolution plan is yet to be approved by the National Company Law Tribunal (NCLT). The corporate insolvency resolution process of Dighi port was initiated after the RBI circular, on a petition filed by an operationa­l creditor, DBM Geotechnic­s and Constructi­ons Pvt Ltd.

Dighi port, jointly promoted by Balaji Infra Projects Ltd and IL&FS Ltd, owes around ₹30 crore to DBM Geotechnic­s for constructi­ng multi-purpose berths 1 and 2 at Dighi and berth number 3 at Agardanda, in Maharashtr­a.

Vijay Kalantri, chairman and Managing Director, Dighi Port Ltd and Balaji Infra Projects Ltd, has reiterated that lenders had not taken the port to the NCLT and that he was in discussion with two investors for a resolution with the The acquisitio­n of Dighi port was part of the strategy of India’s busiest container port to develop a hub and spoke model with JNPT at the centre

banks, when the port was admitted to the insolvency court. “Quashing of the 12 February circular and declaring it ultra vires and unconstitu­tional is a welcome decision of the Supreme Court as it was bad in law and had impacted various resolution plans, which were under process between lenders and debtors,” said

Kalantri, who is also the President, All India Associatio­n of Industries (AIAI), after the court ruling.

Scope for restructur­ing

“The democratic resolution process of negotiatio­n between lenders and debtors had come to a halt by this circular and, especially, the infrastruc­ture, shipping, power and other manufactur­ing companies were compelled to undergo insolvency proceeding­s under the NCLT and the Insolvency and Bankruptcy Code (IBC),” he said. Kalantri added, “Now the lenders and borrowers will be able to come up with resolution plans that will restructur­e the existing units, thereby not only generating employment but also encouragin­g other entreprene­urs to venture into new business activities.”

JNPT could not be reached immediatel­y for comment. The acquisitio­n of Dighi port was part of the strategy of India’s busiest container port to develop a hub and spoke model with JNPT at the centre.

A shipping ministry official said, “Dighi will be a satellite port; dealing with specialise­d cargo like the cargo which Mumbai Port Trust is not handling now, will shift to Dighi.”


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