Athena Demwe bid: NCLAT rejects Navayuga Engineering Company's plea
NCLAT) has rejected an appeal filed by Navayuga Engineering Company Ltd, which had challenged the lenders' decision to disqualify it from bidding for the 1,750 MW Athena Demwe Power Ltd on the Lohit river in Arunachal Pradesh.
The Lower Demwe hydroelectric project, which is perceived to be of great strategic and national importance, has been in development since 2009. It was granted environmental clearance in 2010 but was delayed due to pending forest clearances.
Originally, Navayuga Engineering. through its wholly owned subsidiary Regina Infrastructure Pvt Ltd (RIPL), had invested ₹235.35 crore and held 21.55% in the company. The company had also signed a memorandum of understanding (MoU) with the promoters of Athena Demwe Power to eventually acquire a controlling stake of 51% through further infusion of funds. However, in September 2017, Athena Demwe Power was admitted for insolvency resolution following an application filed by the Indian Bank. The company's total admitted liabilities are of ₹566 crore.
The genesis of the dispute lies in the lenders' decision to disqualify Navayuga Engineering as a resolution applicant under Section 29A of the Insolvency and Bankruptcy Code (IBC). Subsequently, the company approached the National Company Law Tribunal to challenge the decision of the committee of creditors (CoC) to disqualify the company.
In 2018, the government introduced Section 29A, which disqualifies defaulting promoters and connected entities from bidding for their own companies.
On May 26 last year, the
