A failed restructuring plan first initiated in 2015 and subsequent default have marked the account as a non- performing asset in the books of banks. Canara is the second bank to file an insolvency plea against the company even as a petition by lead lender
filed in February is awaiting approval from the Hyderabad bench of the National Company Law Tribunal (NCLT).
Canara Bank and Gayatri Projects did not respond to emails seeking comment. “This is a classic case of why the bankruptcy code has failed to meet expectations.
Despite rules saying that the application of financial creditor should be admitted within 14 days, it has been delayed without any reason,” said a person in the know. “Meanwhile, the market cap of the company is regularly declining day by day and all banks can do is sell the pledged shares in the open market for a loss.”