In Brief
Hiranmaye Energy Ltd. defaulted on a loan in March 2018. Its promoter, Power Trust, later proposed debt restructuring in 2020, but failed to meet pre-conditions. REC Ltd., the lender, filed for insolvency proceedings. Power Trust argued the restructuring had reset the default date within a COVID-relief moratorium period. The Supreme Court upheld the lower courts' rejection of this argument, holding that unconditional restructuring proposals do not alter original defaults. The Court reaffirmed that once default is proven, NCLT must admit insolvency applications with limited discretion. A company's viability is irrelevant at admission stage. The appeal was dismissed.
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