The Hyderabad bench of the National Company Law Tribunal (NCLT) on Friday declared T.V. Reddy, former chairman of Deccan Chronicle Holdings Ltd., bankrupt in personal guarantor insolvency proceedings.
The bankruptcy declaration came following a petition filed by L&T Finance Ltd. over unpaid dues amounting to INR 756.06 million. The tribunal has appointed Renuka Devi Rangaswamy as the bankruptcy trustee to carry out functions as per the Insolvency and Bankruptcy Code, 2016.
A bench comprising judicial member Rajeev Bhardwaj and technical member Sanjay Puri passed the order after noting that no repayment plan was submitted by the personal guarantor.
“There being no repayment plan submitted by the personal guarantor or any material indicating resolution of the insolvency, this tribunal finds it just and proper to order the commencement of bankruptcy proceedings against the personal guarantor in accordance with the provisions of the IBC, 2016,” the bench stated.
The case dates back to 2013 when L&T Finance had extended a term loan of INR 250 million to Deccan Chronicle Holdings. Reddy had stood as the personal guarantor for this loan facility.
Following default by Deccan Chronicle Holdings, an arbitral award in 2013 directed both the company and Reddy to jointly and severally pay INR 250.26 million, along with interest at 15% per annum from 2012.
In 2017, the tribunal admitted Deccan Chronicle Holdings into insolvency proceedings. Two years later in 2019, it approved a resolution plan by SREI Multiple Assets Investments Trust and Vision India Fund.
However, Reddy’s debt remained unresolved under the corporate insolvency proceedings. This prompted L&T Finance to issue a demand notice in 2020 to the personal guarantor seeking payment of the outstanding amount.
After receiving no repayment, L&T Finance filed a petition for initiation of the individual insolvency resolution process against Reddy. The tribunal admitted this petition in 2022.
Following Reddy’s failure to submit a resolution plan, L&T Finance filed an application to initiate bankruptcy proceedings against him, which has now been approved by the tribunal.
