New Delhi: Lenders will cite one day default clause under Insolvency and Bankruptcy Code (IBC) to defend their action against erring promoters taken to insolvency under the now defunct February 12, 2018 circular of the Reserve Bank of India (RBI). Sources said promoters of about half a dozen stressed power entities referred to National Company Law Tribunal have approached the bankruptcy court to quash insolvency proceedings against them as it has become non-maintainable following the Supreme Court order declaring the RBI circular ultra vires. Also Read – Thermal coal import may surpass 200 MT this fiscalBut banker’s are confident that stressed assets referred to NCLT will continue to face bankruptcy proceedings as IBC clearly states such referral even if there is one day delay or default by any entity in meeting its loan commitments. “There is no question that stressed assets referred to NCLT will come out from there following the apex court’s ruling. These assets continue to remain stressed and lenders are sure that resolution under IBC framework would work best for all stakeholders,” said chairman and managing director of a leading state-owned financial institution asking not to be named. Also Read – Food grain output seen at 140.57 mt in current fiscal on monsoon boost”If need be, lenders would also file an affidavit with NCLT to continue the bankruptcy proceedings in the case of companies that faced such action over the earlier RBI circular,” he added. Five stressed power producers, including 3,600 MW KSK Mahanadi Power Co. Ltd., 1920 MW Lanco Amarkantak Power Ltd., 600 MW Avantha Power (Jhabua), 1350 MW Rattan India Nashik Power Ltd. (formerly Indiabulls) and 1,350 MW Rattan India Power (Amravati project) are preparing to oppose insolvency proceedings as lenders filed petitions against them as per February 12 RBI circular. The projects owe about Rs 50,000 crore to banks. Lanco Amarkantak has sought time from the NCLT to submit documents that suggests that Axis Bank had initiated insolvency proceedings against it under the now-defunct RBI circular. KSK Mahanadi and Avantha Power have also cited the apex court order in earlier NCLT hearing. The other projects are also thinking of taking up the matter in the court. The February 12 RBI circular had also mandated resolution process by lenders even if there was one day delay in repayment by debtors. This stands annulled by Supreme Court. However, IBC gives powers to any creditor to take a company to NCLT even if there is one day delay in repayments and the outstanding amount is in excess of Rs 1 lakh. As this provision stands, lenders want to maintain bankruptcy proceedings against assets that remain in stress. In all about 70 cases with total bank exposure of about Rs 4 lakh crore was declared as stressful by the banks post the RBI circular. This included 34 stressed power projects worth 40,000 MW having total bank of close to Rs 1.8 lakh crore. Its not that institutions, including PFC did not try to resolve certain power projects, but none of the attempts remained successful. In the case of KSK Mahanadi, Adani Group showed interest but it soon withdrew from the race as lenders were divided on the level of hair cut and UP state regulator sought cut in tariff for the project. In case of an Rs 600 crore one time settlement scheme worked out for Lanco Amravati, the sole investor backed out from the race at the last minute. With relation to Avantha Power (Jhabua) an Rs 100 crore settlement for PFC got stalled after one of the operational creditors took the asset to NCLT.