Companies

NCLT admits TVS Automobile plea against KPN to recover ₹5.27-cr dues

Our Bureau Chennai | Updated on September 08, 2021

The National Company Law Tribunal (NCLT) on Tuesday admitted an application filed by TVS Automobile Solutions Pvt Ltd against Salem-based KPN Travels, a well-known travels operator in Tamil Nadu, to recover dues of ₹5.27 crore for supply of various products between August 2017 and December 2019.

The application sought to initiate the Corporate Insolvency Resolution Process (CIRP) against KPN; declare moratorium and appoint Interim Resolution Professional.

The order by R Sucharitha, Member (Judicial) and B Anil Kumar, Member (Technical), said the application stands admitted in terms of Section 9 (5) of IBC, 2016 and the moratorium shall come into effect as of this date. It was mentioned in the order that TVS Automobile is engaged in the supply of automobile parts, sales and distribution and after sales services of cars, heavy commercial vehicles, light commercial vehicles and other vehicles. KPN had placed several orders with TVS Automobile for supply of spares such as filter, brakes, linings, clutch plates, gear box components, tyres and tubes, lubricants and grease.

The case

KPN failed to make payment for the same and it is evident from the statement of accounts of the travel operator that it had an outstanding amount of ₹3.94 crore, payable to TVS Automobile. It was submitted that the payment, which is due for the period from August 31, 2017, to December 31, 2019, amounted to ₹3.94 crore at an interest rate of 18 per cent per annum. Hence, the total amount due and payable by KPN was ₹5.27 crore, the application said.

KPN’s stance

However, KPN said that TVS Automobile had not established the debt and the default on the part of KPN and that there was a pre-existing dispute. KPN also submitted that there was no proper service of the Demand Notice and it was bereft of invoices. Hence, it was submitted that the mandatory requirement under Section 8 of IBC, 2016 was not complied with and that the application is liable to be dismissed on the said count.

Published on September 08, 2021

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