The High Court of Gujarat has stayed the order passed by NCLT to initiate insolvency proceedings against Rasna.

“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 has been stayed in the first hearing held today in the High Court.,” said a statement from Rasna Group’s legal team

Rasna has also filed a petition in the NCLAT against the NCLT order. However, it also approached the High Court after the resolution professional told the company that it will not be able to operate the bank accounts. The company asked the High Court to impose a stay until the matter is heard by NCLAT.

Rasna Private Ltd has been dragged into insolvency proceedings by Bharat Road Carrier Private Ltd for non- payment of over ₹71 lakh.

The date of default as mentioned is much before the advent of the Covid-19 pandemic. Hence, the Corporate Debtor ( Rasna Private Ltd) cannot seek shelter under Section 10A of IBC, 2016, the NCLT had said in its order on Friday.

“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,” the High Court order said