# In the matter of Hiranmaye Energy Limited

> NCLT judgment dated 2024-07-01. Citation: TCN-2024-NCLT-01097. The case involves an application under Section 60(5) of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 1 Jul 2024
- **Citation:** TCN-2024-NCLT-01097
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/hiranmaye-energy-limited-966c67c3

## Summary

### Background

The case involves an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of NCLT Rules, 2016. REC Limited initiated Corporate Insolvency Resolution Process (CIRP) against Hiranmaye Energy Limited. Power Trust, the majority shareholder of Hiranmaye Energy Limited, filed an appeal against the admission order, which was dismissed by NCLAT. Subsequently, Power Trust appealed to the Hon'ble Apex Court, seeking to settle outstanding dues. The Apex Court allowed Power Trust to submit a settlement proposal to the Committee of Creditors (CoC). The Resolution Professional (RP) extended the timeline for submission of Expression of Interest (EOI). Power Trust sought to keep the CIRP in abeyance to facilitate settlement discussions. The

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## Facts

REC Limited initiated CIRP against Hiranmaye Energy Limited. Power Trust, the majority shareholder, appealed the admission order, which was dismissed by NCLAT. Power Trust then appealed to the Supreme Court, seeking to settle outstanding dues. The Supreme Court allowed Power Trust to submit a settlement proposal to the CoC. The RP extended the EOI submission timeline. Power Trust sought to keep CIRP in abeyance for settlement discussions. Power Trust submitted a settlement proposal, which the CoC rejected on 11.06.2024. Power Trust claimed the CoC didn't provide an opportunity to revise the proposal, violating natural justice. The CoC noted Hiranmaye's power plant is operational and a revenue-generating asset. Power Trust offered INR 1,418.58 Crore, with INR 317.02

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## Issues and analysis

### Issue 1: Whether the CoC's rejection of Power …

**Ratio:** The CoC has the authority to accept or reject a settlement proposal based on its

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**Reasoning:** The court considered the CoC's reasons for rejecting the proposal, including the

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**Interpretation:** The CoC's decision-making process must be transparent and fair, considering the

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**Application:** The court directed the CoC to reconsider Power Trust's proposal after granting

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## Parties

- **Judges:** BIDISHA BA…; D. Ar…
- **Appellants:** Power T…
- **Respondents:** HIRANMAYE ENERGY…; REC Lim…

## Timeline

- **2024-01-02 — Admission in…**: Hiranmaye Energy Limited was admitted into…
- **2024-01-25 — NCLAT Dis…**: Power Trust's appeal against the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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