Insolvency proceedings started against Himalayan Mineral Water, this is the whole matter

The National Company Law Tribunal (NCLT) has directed to start insolvency proceedings against Himalayan Mineral Waters. Jammu and Kashmir Bank had filed a petition against the default in the corporate guarantee given for LEEL Electricals, which the tribunal has accepted. 

The Allahabad bench of NCLT has also appointed Bhupesh Gupta as Interim Resolution Professional (IRP) for the Corporate Insolvency Resolution Process (CIRP) of this Dehradun-based company.

In its order passed last Monday, a two-member bench said, "We are satisfied that the applicant/financial creditor (J&K Bank) has proved the indebtedness and defaults, which are in excess of the prescribed limit. The application under Section 7 is found fit to initiate CIRP against the corporate debtor (Himalayan Mineral Waters)."

J&K Bank had claimed a default of Rs 50 crore against Himalayan Mineral Waters, which is engaged in the business of manufacturing beverages. Himalayan Mineral Waters was the corporate guarantor for the credit facilities availed by LEEL Electricals.

LEEL Electricals sold their business to Havells India in May 2017 for Rs 1,550 crore. The NCLT commenced insolvency proceedings against LEEL Electricals in April 2020, following a petition submitted by one of its current borrowers. After failing to find a buyer, the NCLT issued a liquidation order in December 2021.

About two months ago, market regulator Sebi issued a Rs 14.2 crore penalties on LEEL Electricals proprietor Bharat Raj Punj and six former staffers. They received a five-year suspension from the stock market for manipulating and interfering with the company's accounts. Aside from that, they have been forbidden from working in any capacity for any publicly traded firm or registered intermediary for three years.