New Delhi: The National Company Law Tribunal (NCLT) Monday admitted State Bank of India’s plea to initiate insolvency proceedings against Bhushan Energy Ltd.

The total amount in default as on 31 October was around Rs494 crore, the SBI petition said.

NCLT also accepted the appointment of Navneet Kumar Gupta as the new interim resolution professional (IRP) in place of Sawant Goliawala, partner Deloitte.

“In any case there is any violation, the IRP would be at liberty to make appropriate application to this tribunal with a prayer for passing an appropriate order," the order passed by the tribunal on Monday said.

In December, the NCLT bench had asked SBI to consider the appointment of a new IRP after Bhushan Energy objected to appointing Goliawala citing conflict of interest.

Insolvency code requires a high degree of independence and integrity, Bhushan Energy had pleaded. Since Deloitte was also involved in a tariff negotiation between Bhushan Steel and Bhushan Energy, Bhushan Energy had expressed its apprehension with respect to Goliawala’s neutrality. The IRP, in such a scenario, would not be free of ‘external and professional influence’ as the partners have pecuniary interest in the matter, Bhushan Energy had said.

Bhushan Energy had earlier objected to the insolvency proceedings initiated by SBI, calling it “premature".

“The possibility of resolution under the Insolvency and Bankruptcy Code widened up as a large number of players may apply with much more ambitious and varieties of resolution plans… Therefore, it is not possible to accept that the aforesaid argument that the petition is in anyway premature," the order said.

Under the Insolvency and Bankruptcy Code, debtors and creditors must agree to a time-bound resolution of debt to avoid insolvency.

Incorporated in 2005, Bhushan Energy is based in Dhenkanal, Odisha. It is a subsidiary of Bhushan Steel which is one of the 12 NPA accounts notified by the Reserve Bank of India (RBI) earlier this year. Bhushan Steel has a gross debt of over Rs42,000 crore.

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