Reliance Infrastructure’s HK Toll Road Admitted into Insolvency Proceedings over Rs 282.59 Crore Default

Reliance Infrastructure Ltd. has a subsidiary named H.K. Toll Road Private Limited, which has been admitted into insolvency proceedings by the National Company Law Tribunal (NCLT), Mumbai, after a petition was filed by Canara Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016. The petition was filed by Canara Bank, which is the lead lender of a consortium that had financed the company’s highway project in Tamil Nadu.

According to the order, Canara Bank had claimed an amount of Rs 282.59 crore, which comprises principal dues of Rs 234.22 crore and interest of Rs 48.36 crore. The dispute arises out of the financial assistance extended to H.K. Toll Road for the development, operation and maintenance of the Hosur–Krishnagiri stretch of National Highway-7 in Tamil Nadu. The project was financed through a consortium led by Canara Bank, which had an exposure of Rs 310 crore out of the total debt amounting to Rs 555 crore.

Canara Bank contended before the Tribunal that the company has failed its repayment obligations and continued to remain in default despite repeated demands. It referred to loan agreements, security documents, mortgage deeds, revival letters, account statements, NSL records and other financial records to establish the existence of debt and prove the default.

H.K. Toll Road contended that the default occurred due to the National Highways Authority of India (NHAI) terminating the concession agreement in January 2024, the company submitted that it had been servicing its debt obligations until the termination. It argued that substantial claims and termination payments that are recoverable from NHAI are assumed to exceed the debt claimed by Canara Bank and that the insolvency proceedings were premature.

Consequently, the Tribunal admitted the Section 7 application and has commenced the Corporate Insolvency Resolution Process (CIRP) against H.K. Toll Road Private Limited and has imposed a moratorium under Section 14 of the IBC.

Reliance Infrastructure has stated that it is evaluating the implications of the order and will take appropriate legal steps in accordance with applicable law. They will be looking into available remedies, including appellate proceedings, against the NCLT order.