Update on 4 September on the story below: The Gujarat High Court has stayed NCLT order

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Ahmedabad: Ahmedabad headquartered Rasna Pvt Ltd, the country’s leading beverage company, has suffered a major blow in its application to the National Law Tribunal for non-payment of Rs 71 lakh owed to Raigad-based Bharat Road Carrier Pvt Ltd. The NCLT’s Ahmedabad bench has suspended the company’s board after giving a verdict to hand over the entire management of the company to an interim resolution professional (IPR).

A bench of Shamim Khan and Sameer Kakar of the Ahmedabad NCLT removed all members associated with Rasna’s promoters from the board and appointed Ravindra Kumar Goyal as TRP for further proceedings and asked him to take over the administration of the company with immediate effect.

Rasna argued in his defense that, it has claimed Rs. 1.25 crore as damages from the transport company Bharat Road Carrier in the commercial court of Ahmedabad, the details of which have been concealed by Bharat Road Carrier and as per the new rules, claims below Rs 1 crore cannot be tried in NCLT. However, the Tribunal did not accept both the arguments of Rasna.

Rasna Private Ltd has been dragged into insolvency proceedings by Bharat Road Carrier Private Ltd for non- payment of over ₹71 lakh. The National Company Law Tribunal in Ahmedabad has admitted the application. As the date of default as mentioned is much before the advent of the Covid-19 pandemic, the Corporate Debtor ( Rasna Private Ltd) cannot seek shelter under Section 10A of IBC, 2016, the NCLT said.

Bharat Road has transported various goods for Rasna for which it has raised various invoices during the period from April 2017 to August 2018. “The corporate debtor (Rasna), in the written submission, has acknowledged the receipt of said demand notice. It is the case of the applicant (Bharat Road) that despite repeated reminders and sending the demand notice, the corporate has failed to pay the amount demanded,” the order said.

On its part, Rasna had disputed some of the invoices raised by Bharat Roads. In 2018, the corporate debtor instituted a civil suit for damages amounting to ₹1.25 crore before the Commercial Court at Ahmedabad. The same was referred to mediation. During the mediation process, Rasna did not appear before the mediator and hence, the mediation failed.

Under insolvency, a new promoter will take control. But since the dues outstanding is only ₹71 lakh, the current owners will likely settle the amount or file a plea in a higher court. DeshGujarat