HBI Staff | Hyderabad 
The National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Himalayan Mineral Waters, following Jammu & Kashmir Bank’s plea over a default on a corporate guarantee for LeeL Electricals. The Allahabad bench of NCLT appointed Bhoopesh Gupta as the interim resolution professional for the Corporate Insolvency Resolution Process (CIRP) of the Dehradun-based company.
The tribunal acknowledged that J&K Bank, the financial creditor, successfully demonstrated a debt and default exceeding the threshold limit, warranting the initiation of CIRP against Himalayan Mineral Waters. J&K Bank claimed a default of ₹50 crore against the company, which had guaranteed credit facilities for LeeL Electricals.
In May 2017, LeeL Electricals sold its consumer durable business to Havells India for ₹1,550 crore. Insolvency proceedings began against LeeL Electricals in April 2020, leading to a liquidation order in December 2021 due to the lack of a buyer.
In 2015, a consortium led by State Bank of Bikaner & Jaipur (now State Bank of India) extended ₹50 crore in credit facilities to LeeL Electricals, with Himalayan Mineral Waters providing a guarantee. Despite the sale of its business, LeeL Electricals failed to make payments, leading to the declaration of its credit facilities as non-performing assets in January 2019.
J&K Bank rejected a one-time settlement offer from the borrower and sent a guarantee invocation notice in February 2020 to all guarantors, including Himalayan Mineral Waters, seeking payment.
Himalayan Mineral Waters argued that the consortium agreement required collective action by all banks, not individual claims. However, the NCLT found this argument untenable and confirmed a clear default by the company. Consequently, NCLT admitted the application under Section 7 of the I&B Code 2016 and declared a moratorium under Section 14.
source CNBC TV18
