Anrak Aluminium gets HC breather on a RBI circular initiating insolvency process for the company

Anrak Aluminium has got another relief from High Court in its way to restart operation at its alumina/aluminium plant. The Hyderabad High Court on Thursday, November 16 refused to stay an RBI circular that directed  Anrak aluminium company to be put on the anvil of insolvency process at the National Company Law Tribunal (NCLT).

A writ appeal was filed by RBI expressing grievance over the order of a single judge on their circular. The said judge found fault with the RBI circular and with the SBI for initiating the insolvency process even after agreeing to the company's one-time settlement offer of INR 1,275 crore. Chief Justice TB Radhakrishnan and Justice S V Bhatt heard the writ appeal filed by RBI and refused to put a stay order on the circular.

Anrak was a joint venture firm formed by Penna industrial group and Ras Al Khaimah of UAE to set up an aluminium plant in Vizag agency area.  AP Mineral Development Corporation signed an agreement to supply bauxite for the plant. However, following resistance from tribals in the state, AP government cancelled the agreement.

The single judge raised a relevant question on SBI’s request for insolvency process on the ground that when the state failed to fulfil its commitment, a company cannot be held responsible for the same. The bench of HC judges stayed the single judge order for three weeks and posted the case to November 28.

This development has given hope to the stalled plant owners who have been struggling to start operations.