In a significant development favoring Rasna, the Gujarat High Court issued a stay order on Monday, effectively halting the NCLT’s directive to commence insolvency proceedings against the indigenous beverage brand.
Last week saw a significant development as the Ahmedabad bench of the National Company Law Tribunal (NCLT) directed the initiation of the Corporate Insolvency Resolution Process (CIRP) against Rasna due to a default of INR 71.27 lakh. This action also resulted in the appointment of an interim resolution professional, leading to the suspension of the board.
The promoters of Rasna Industries contested the National Company Law Tribunal (NCLT) order and brought the matter before the high court. The high court subsequently issued a stay on the verdict, pending the listing of an appeal filed against it before the National Company Law Appellate Tribunal.
“Considering the aforesaid, by way of ad-interim relief, the said order dated 01.09.2023 is directed not to be acted upon till the statutory appeal which is filed before the NCLAT is listed for hearing in the peculiar facts of the present case,” an order passed by Justice V D Nanavati stated on Monday.
The NCLT issued the order in response to a petition filed by one of Rasna’s operational creditors, Bharat Road Carriers, alleging a default of INR 71.27 lakh. In addition, Ravindra Kumar Goyal was appointed as the Interim Resolution Professional (IRP).
A statement from Rasna Group Legal Team said, “Considering the overall facts and circumstances of the case, the High Court of Gujarat was pleased to entertain the petition filed by Rasna challenging the order of NCLT.”
“The Order of the NCLT passed on Friday i.e., 01.09.2023 has been stayed in the first hearing held today, i.e. 04.09.2023 in the High Court,” it said.
Bharat Road carriers had claimed operational debt of INR 71.27 lakh plus interest on service tax and interest on unpaid amounts as of March 31, 2019. It had transported various goods to Rasna, for which it had raised various invoices during the period from April 2017 to August 2018.
Rasna admitted that they had availed transportation services from the transporter but stated that there were pre-existing disputes between the parties.
In November 2018, Bharat Road carriers instituted a civil suit for damages amounting to INR 1.25 crore before the commercial court in Ahmedabad, which was referred for mediation.
However, during the mediation process, the operational creditor did not appear before the mediator and, hence, it failed.
NCLT said Rasna has failed to provide reasons for the dispute to the operational creditor.
“In our view, the arguments so as to the dispute appear to be moonshine. As such the applicant has proved that there is a default and the amount in default is more than INR 1 lakh,” NCLT said.
“Under the said circumstances, this tribunal is left with no other option than to proceed with the present case and initiate the CIRP in relation to the corporate debtor.
