Case Details

Case Name: JM Financial Asset Reconstruction Company Ltd vs. Bheema Cements Ltd

Court/Authority: National Company Law Tribunal (NCLT), Hyderabad Bench - I

Case Numbers: CP(IB) No. 97/7/HDB/2018, IA (IBC) (Liq.,) 13/2025, IA (IBC) 695/2026, IA (IBC) 786/2026

Date of Order: 21 May 2026

Period of Dispute: The Corporate Insolvency Resolution Process (CIRP) was initiated on 9 July 2018, with the Resolution Plan approved on 11 February 2020. The implementation period extended through multiple extensions until 2026.

Parties Involved

Petitioner/Financial Creditor: JM Financial Asset Reconstruction Company Ltd

Corporate Debtor: Bheema Cements Limited

Successful Resolution Applicant (SRA): Consortium comprising M/s. Fortuna Engi Tech and Structural (India) Private Limited, Mr. Prasanna Sai Raghuveer Kandula, Mr. Tadimella Rajakishore, and M/s. Murgud Vincom Private Limited

Ex-Resolution Professional & Monitoring Committee Member: Mr. G. Madhusudhan Rao (IBBI/IPA-001/IP-P00181/2017-18/10360)

Newly Appointed Liquidator: Mr. Kalvakolanu Murali Krishna Prasad (IBBI/IPA-001/IP-P00967/2017-2018/11588)

Other Financial Creditors: Union Bank of India (successor to Corporation Bank after merger on 1 April 2020)

Issues / Allegations / Violations

The core issue involves repeated defaults by the Successful Resolution Applicant (SRA) in implementing the Approved Resolution Plan despite multiple extensions granted by judicial forums.

Approved Resolution Plan Details:

  • Total Resolution Plan Consideration: ₹212.23 Crores
  • Cash/Bank payment (Principal): ₹190.00 Crores
  • Interest proposed: ₹19.62 Crores
  • Shares to Secured Financial Creditors: ₹2.61 Crores (8% of total first-time subscribed Equity Share Capital)

Payment Schedule as per Approved Plan:

  • 1st instalment (30 days): ₹10.00 Crores
  • 2nd instalment (3 months): ₹20.00 Crores
  • 3rd instalment (16 months): ₹50.00 Crores
  • 4th instalment (22 months): ₹50.00 Crores
  • 5th instalment (28 months): ₹60.00 Crores
  • Interest @5% PA from 10th to 16th month, @6% PA accumulated from 10th to 16th month paid in 28th month, and @11% PA monthly from 17th to 28th month

Share Allocation to Financial Creditors:

  • JM Financial ARC: ₹2.436 Crores (24.360 lakh shares)
  • Corporation Bank: ₹0.174 Crores (1.740 lakh shares)

Extended Timelines Granted:

1. Original implementation period: 28 months from 11 February 2020 (until 10 June 2022)

2. First Extension (IA No. 634/2022): 10 October 2022 - 6 months additional time (until 9 April 2023)

3. Second Extension (IA No. 1538/2022): 4 January 2023 - 8 months additional time (until 26 December 2023)

4. NCLAT Order (19 January 2024): Entire payment by 31 March 2024 for UBI and staggered payments until 19 January 2025 for JM Financial

Defaults and Outstanding Amounts:

  • The SRA paid only ₹62.75 Crores against the total principal of ₹190.00 Crores
  • Third instalment of ₹50.00 Crores paid only partly (₹12.50 Crores), leaving balance of ₹37.50 Crores
  • Entire fourth instalment of ₹50.00 Crores remained unpaid
  • Entire fifth/final instalment of ₹60.00 Crores remained unpaid
  • Total principal outstanding: ₹137.25 Crores plus accrued interest
  • The SRA claimed to have infused nearly ₹20 Crores separately for operationalizing the corporate debtor

Findings & Observations

The NCLT made several critical observations:

1. Violation of Judicial Directions: The SRA repeatedly violated specific payment timelines fixed by the Hon'ble NCLAT in its order dated 19 January 2024 and affirmed by the Hon'ble Supreme Court on 5 March 2024.

2. Abuse of Process: The tribunal found a "deeply disturbing pattern" where liquidation applications were repeatedly filed and then withdrawn based on private arrangements and revised payment schedules dehors judicial timelines.

3. Role of Resolution Professional: The ex-Resolution Professional, Mr. G. Madhusudhan Rao, facilitated repeated restructuring of payment obligations without seeking judicial modification from appellate forums, contrary to his duties as an officer of the court.

4. Exhaustion of Indulgence: The NCLAT's order dated 19 January 2024 specifically provided that upon any breach of payment terms, the SRA's appeal would stand deemed dismissed and financial creditors would be entitled to seek liquidation.

5. Failure of Resolution Plan: The tribunal concluded that the Resolution Plan had failed and was no longer capable of implementation within the judicial framework.

Penalties / Settlements / Directions

Final Orders Passed:

1. IA (IBC) (Liq.) 13 of 2025 allowed

2. IA No. 786 of 2026 (seeking withdrawal of liquidation application) dismissed

3. IA (IBC) 695/2026 (for filing counter by SRA) dismissed

4. Corporate Debtor, M/s. Bheema Cements Limited, ordered to be liquidated under Section 33 of IBC, 2016

5. Mr. Kalvakolanu Murali Krishna Prasad appointed as Liquidator under Section 34 of IBC, 2016

6. Remuneration of Liquidator to be determined as per IBBI (Liquidation Process) Regulations, 2016

7. Section 33(5) of IBC, 2016 to come into force immediately

Referral to IBBI:

  • The Registry directed to forward the order to IBBI for examination/action against Mr. G. Madhusudhan Rao, Ex-Resolution Professional
  • IBBI to examine issues concerning prolonged implementation proceedings, successive revised repayment arrangements, repeated withdrawal/restoration of liquidation proceedings, and continuation of professional engagement/remuneration

Corrective Actions & Future Obligations

Liquidator's Appointment: Mr. Kalvakolanu Murali Krishna Prasad (Registration No. IBBI/IPA-001/IP-P00967/2017-2018/11588) is appointed as Liquidator with immediate effect.

Liquidation Process: The liquidation will proceed under the provisions of the Insolvency and Bankruptcy Code, 2016 and the IBBI (Liquidation Process) Regulations, 2016.

IBBI Examination: The IBBI is mandated to examine the professional conduct of Mr. G. Madhusudhan Rao regarding his role in facilitating private arrangements that deviated from judicial directions and prolonged the implementation process.

Final Ruling & Enforcement

The NCLT ordered immediate liquidation of Bheema Cements Limited under Section 33 of the IBC, 2016, citing complete failure of the Resolution Plan implementation despite multiple opportunities and judicial indulgences.

The tribunal emphasized that the foundational objectives of the IBC - certainty, finality, and time-bound resolution - had been completely undermined by the prolonged proceedings and repeated deviations from judicial timelines.

The liquidation order is immediately enforceable, and the newly appointed Liquidator is required to commence the liquidation process in accordance with the statutory provisions and regulations.