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The appellant argued that the corporate debtor had proposed a Corporate Debt Restructuring (CDR) to address its financial issues. Corporate Debt Restructuring is a mechanism wherein a company negotiates with its creditors to modify the terms of its existing debts, providing some relief to the distressed company
The National Company Law Appellate Tribunal (NCLAT) has recently affirmed the order of the National Company Law Tribunal (NCLT), permitting the initiation of the Corporate Insolvency Resolution Process (CIRP) against Birla Tyres Ltd.
A division bench of the National Company Law Appellate Tribunal (NCLAT), including Judicial Member Rakesh Kumar Jain and Technical Member Naresh Salecha was hearing an appeal challenging the order of the National Company Law Tribunal (NCLT) in Kolkata.
The NCLT order had allowed a Section 9 petition, paving the way for the initiation of the Corporate Insolvency Resolution Process (CIRP) against Birla Tyres Ltd.
The appellant argued that the corporate debtor had proposed a Corporate Debt Restructuring (CDR) to address its financial issues. Corporate Debt Restructuring is a mechanism wherein a company negotiates with its creditors to modify the terms of its existing debts, providing some relief to the distressed company.
The appellant claimed that the corporate debtor had applied for necessary no-objection letters from the National Stock Exchange of India Ltd. and BSE Ltd. as part of the Corporate Debt Restructuring (CDR) process.
However, before the corporate debtor could receive these no-objection letters, the Adjudicating Authority (NCLT) passed an order admitting the corporate debtor into the Corporate Insolvency Resolution Process (CIRP).
The operational creditor raised several invoices over time, all of which were duly accepted by the corporate debtor without any objections, and some payments were made. However, 44 invoices related to the supply of goods remained outstanding.
The creditor argued that the corporate debtor had ample opportunities to file a reply affidavit but chose not to do so, failing to provide reasons for this decision.
The tribunal agreed with the operational creditor and rejected the appeal while noting that the corporate debtor was given all possible opportunities.
“From above, it is clear that the Adjudicating Authority gave all possible opportunities to the Corporate Debtor to present his case but the Corporate Debtor miserably failed to do so. Therefore, the allegations on this account by the Appellant herein are not sustainable,” the order reads.
Mr. Ankit Virmani & Ms. Ruchika Agarwala, Advocates appeared for the appellant.
Mr. Abhijeet Sinha, Mr. Swankit Nand, Mr. Saikat Sarkar, Mr. Anuj Tiwari, for RP.
Mr. Kunal Vajani, Mr. Kunal Mimani, Mr. Kartikey Bhatt, Mr. Akshay Luthra, Mr. Abhinav Jain appeared for the operational creditor.
Case title: Manav Investment & Trading Company Limited vs SRF ltd
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