Companies

Kolkata Bench of NCLT initiates insolvency proceedings against Birla Tyres

BL Kolkata Bureau | Updated on: May 09, 2022

Admits petition filed by SRF claiming a default in payment of ₹15.84 crore

The Kolkata Bench of National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Birla Tyres, a BK Birla group company, based on a petition filed by one of its operational creditors SRF Ltd.

It has appointed Seikh Abdul Salam as Interim Resolution Professional (IRP) to carry out the functions as per the insolvency code.

SRF had claimed a default in payment of ₹15.84 crore, which includes principal of ₹10.06 crore and interest of ₹5.78 crore, for the supply of Tyre Cord Fabric as of July 8, 2021.

“The application bearing CP (IB) No. 250/KB/2021 filed by SRF Ltd, the operational creditor, under Section 9 of the Code read with rule 6(1) of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiating CIRP against Birla Tyres Ltd, the corporate debtor, is admitted,” the Kolkata Bench, said in its order dated May 5.

As per Section 14 of the IBC there would be a moratorium and it would have an effect from the date of the order till the completion of the CIRP or until the Adjudicating Authority approves the resolution plan or passes an order for liquidation of corporate debtor, as the case may be.

“We are satisfied upon the basis of documents, including pleadings of parties, i.e. default has occurred and the debt due remains unpaid despite the demand made and also the admission by the corporate debtor of the debt due,” the order said.

Slammed for adjournments

The two-member Bench comprising Harish Chander Suri, Member (Technical) and Rohit Kapoor, Member (Judicial) also slammed the BK Birla group firm for taking a “very casual attempt” to seek adjournments in the matter.

In this matter, the NCLT had issued notice to Birla Tyres on October 20, 2021, over SRF’s plea. On December 22, 2021, the company sought some time to file a reply and sought adjournment. Again on February 28, 2022, it sought some more time and accordingly NCLT granted two more weeks to file the reply affidavit and the matter was directed to be listed on April 5, 2022.

On April 5, Birla Tyres again sought a further extension on the pretext of some disruptions at its factory premise.

 “In view of the facts and circumstances based on record, we are of the considered opinion that it was a very casual attempt made by the Corporate Debtor to seek further adjournment for the 4th time consecutively since October, 2021 and reference to agitation by workers and families in September, 2021 was merely an attempt to prolong the proceedings. Keeping in view, this matter under IBC, 2016 wherein the very object of the Code is to finalise the Insolvency proceedings in a time bound manner for maximisation of value of assets, granting adjournment after another and that too without any basis cannot be permitted by this Adjudicating Authority and thus declined to further extend the time for filling reply affidavit by corporate debtor,” it said.

Published on May 09, 2022
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