NCLT admits Valecha Engineering under Insolvency Resolution Process

A bankruptcy court in Mumbai has admitted listed infrastructure firm Valecha Engineering under the Corporate Insolvency Resolution Process (CIRP) and has appointed Anurag Kumar Sinha as the interim resolution professional of the company.

The State Bank of India (SBI) had filed an application in the Mumbai bench of the National Company Law Tribunal (NCLT) after the company failed to repay its dues exceeding Rs 347 crore.

Mumbai-based Valecha Engineering is into construction of roads, bridges and tunnels, airports and irrigation dams, among other projects.


“The supply of essential goods or services to the corporate debtor, if continuing, shall not be terminated or suspended or interrupted during the moratorium period,” said the tribunal in its 34-page order of October 21, which was made available recently.

Counsels for the lender, Subir Kumar and Disha Shah, argued that the infrastructure company availed and enjoyed the credit facilities but failed to repay the dues as a result of which its accounts were classified as Non-Performing Asset (NPA) in June 2016 as per Reserve Bank of India (RBI) prudential norms.

Countering this, advocate Prateek Seksaria, appearing on behalf of the company,said the application of the bankruptcy code is barred by the law of limitation because it has been filed after three years of the purported default.

However, the tribunal, presided by members Kishore Vemulapalli and Manoj Kumar Dubey, allowed the plea filed by the SBI. It observed that the lender had also initiated recovery proceedings against the company before the Debt Recovery Tribunal on August 8, 2018, for recovery of its legitimate dues and hence the application can’t be termed as time-barred.

In FY2022, the company reported a revenue of Rs 230.81 crore and posted a net profit of Rs 2.33 crore. As per the stock exchange filing, the promoters of the company hold about 18.9% of the company, while public shareholding stands at about 81.91%.

Originally founded in 1957 as Gopaldas Vasudev & Co, Valecha Engineering had started with small road projects for the Brihanmumbai Municipal Corporation (BMC). In 1977, it entered into the field of irrigation projects such as dams. The company was listed on the bourses in December 2000.