CIRP Initiated Against KM Toll Road as Financial Creditor Establishes Default

CIRP Initiated Against KM Toll Road as Financial Creditor Establishes Default​

The Corporate Insolvency Resolution Process (CIRP) has been admitted against KM Toll Road Private Limited, a wholly owned subsidiary of Reliance Infrastructure Limited (RIL). The decision follows the establishment of debt and default by the financial creditor, State Bank of India (SBI), in line with the provisions of the insolvency code.

The resolution process was initiated after the financial creditor presented evidence demonstrating that the corporate debtor defaulted on its repayment obligations under the consortium lending facilities.

Debt and Default Established​

According to the documentation placed before the Adjudicating Authority, the total debt owed by KM Toll Road Private Limited to SBI and other lenders stands at approximately INR 789 crores, stemming from a Common Loan Agreement executed on January 25, 2011. The financial creditor submitted that the CIRP application was based on alleged default in repaying this term loan.

Details regarding the original financing structure are provided below:


The Petitioner reported a total debt amount of INR 233,44,83,922/- including interest and penal interest pertaining to the default. The financial creditor utilized the Record of Default in Form D issued by NeSL to establish the required documentation for initiating CIRP.

Tribunal Adopts Findings on Debt​

The tribunal reviewed various objections raised by KM Toll Road Private Limited, including arguments regarding the application being barred by limitation, and claims that the company was solvent or awaiting funds from arbitration proceedings against NHAI. The court concluded that debt and default were established based on the documentation provided by the financial creditor.

The Adjudicating Authority noted that the corporate debtor has acknowledged the outstanding debt in its balance sheets across financial years including 2019-20, 2020-21, 2021-22, and 2022-23. The court further considered the submission by KM Toll Road Private Limited regarding a One Time Settlement (OTS) Proposal of INR 80 crores made in January 2024, noting that such anticipated events cannot be grounds to stall insolvency proceedings.

CIRP Order Details​

The tribunal ordered the admission of Company Petition No. 597 of 2024 and initiated the CIRP against KM Toll Road Private Limited. Mr. Ashish Avinash Saoji was appointed as the Interim Resolution Professional (IRP) of the corporate debtor. The financial creditor is required to deposit an amount of INR 5 Lakhs towards initial CIRP costs immediately upon receiving the order.

The admission includes a moratorium under Section 14 of the Code, prohibiting actions such as:

• Instituting or continuing any suits against KM Toll Road Private Limited.
• Transferring, encumbering, or disposing of any assets by the corporate debtor.
• Taking any action to foreclose or enforce security interest created by the corporation.

The management of the corporate debt during the CIRP period will vest in the IRP.

RELINFRA Stock Price Movement​

On Wednesday, Reliance Infrastructure Limited shares edged higher to close at ₹69.49, gaining 4.99% in trading. The stock was supported by investor interest, with a total traded volume reported at 45,401 shares.