Pharma Firm Founder, Wife Face Insolvency Proceedings Over Rs 256.29 Crore Dues
New Delhi: The Chennai bench of the National Company Law Tribunal (NCLT) has admitted insolvency resolution proceedings against Orchid Pharma founder and former managing director K Raghavendra Rao and his wife, co-founder R Vijayalakshmi, over their personal guarantees for the company's borrowings.
According to a recent media report in The New Indian Express, the proceedings began nearly six years after Orchid Pharma passed into the Dhanuka Group’s control through the insolvency process. The tribunal issued its order on October 16, 2026, which was subsequently uploaded to the NCLT website on October 27.
The order also initiated a separate insolvency resolution process against Vijayalakshmi. The amount demanded from the guarantors was stated to be Rs 256.29 crore, comprising principal, interest and other penalties.
The tribunal recorded that the personal guarantors had failed to discharge their repayment obligations relating to the company’s credit facilities. These included cash credit, term loans, capital term loans and funded interest term loans.
The dues continued to remain unpaid despite the resolution process through which Dhanuka Laboratories Ltd, a Dhanuka Group company, secured approval to acquire Orchid Pharma in 2019.
Vijayalakshmi’s creditors have been asked to submit their claims to the resolution professional (RP) by December 4. Admission of the personal insolvency resolution process brings a moratorium into effect in relation to the guarantor’s debts.
Under the process, the debtor works with the resolution professional to prepare a repayment plan for consideration and voting by creditors. If a repayment plan does not receive approval, creditors may seek bankruptcy proceedings.
Rao, a prominent first-generation entrepreneur in the Indian pharmaceutical industry, established Orchid Chemicals & Pharmaceuticals on July 1, 1992. He was awarded the Padma Shri in 2011. The company subsequently entered insolvency proceedings in 2017.
The company’s insolvency proceedings followed the NCLT’s admission of a petition filed by lender Lakshmi Vilas Bank. An initial resolution effort involving Ingen Capital fell through after the tribunal annulled its plan. During the second round, the NCLT approved Dhanuka’s resolution proposal on June 25, 2019.
TIE reported that the National Company Law Appellate Tribunal (NCLAT) subsequently overturned that approval, but the Supreme Court reversed the appellate tribunal’s decision. Dhanuka Laboratories formally assumed control of Orchid Pharma on March 31, 2020.
