18 September 2019: In a sign of the huge liquidity crisis facing the economy, Hindustan Construction Company Ltd, a Mumbai-based public-private entity, is struggling to get a whopping Rs 6,070 crore in dues from top public sector undertakings (PSUs) as arbitration awards.
The PSUs that were yet to pay up include the National Highway Authority of India, National Hydro Power Corporation, National Thermal Power Corporation, Ircon International and the National Institution for Transforming India.
In a petition filed in the Supreme Court, HCC said because of the non-payment of the dues, the company was facing a financial crisis that “could destroy the shareholders value and (making the company) face insolvency proceedings”.
As against Rs 6,070 crore dues, “the total loans taken by HCC from banks and financial instruments apart from bank guarantees (BGs) issues by various banks is around Rs 3,948 crore”, HCC said.
It also challenged the Insolvency and Bankruptcy Code (IBC) saying it was violative of fundamental rights.
HCC said the 2016 law created a non-level playing field and artificial financial stress due to non-payment of arbitration awards by government bodies and PSUs.
Since PSUs were defaulters, IBC should not apply to HCC, it reasoned.
Arbitration awards are deemed to be dues under the Arbitration Act.
“However, the actual receipts of such amounts are locked in litigation for years together due to mechanical and casual challenge in one or the other court by way of abusing the process of law,” the plea pointed out.
A bench headed by Justice Rohinton Nariman issued notices to various ministries and the PSUs and sought their response in two weeks.