SRF had claimed a default of ₹15.84 crore for the supply of tire cord fabric
SRF had claimed a default of ₹15.84 crore for the supply of tire cord fabric
9 May (PTI) The National Company Law Tribunal (NCLT) has declared bankruptcy proceedings against Birla Tires Ltd. in a case filed by multi-business chemicals company SRF Ltd., an operating creditor of BK Birla Group.
A two-member bank of the NCLT in Kolkata has also appointed Seikh Abdul Salam as an interim resolution professional (IRP) to oversee the company’s operations following the suspension of the board of directors and also imposed a moratorium under the procedures of the Insolvency & Bankruptcy Board ( IBC) explained).
SRF had claimed late payment of £15.84m, which includes a principal amount of £10.06m and interest of £5.78m for the supply of tire cord fabric as at 8 July 2021.
The court said it was “satisfied on the basis of documents” including the parties’ pleadings as “a default has occurred” and found that the unpaid company debts were not paid and there is also an admission by Birla Tyres , the corporate debtor .
“The application filed … by SRF Ltd., the operative creditor, under Section 9 of the Insolvency and Bankruptcy Rules 2016 to initiate CIRP against Birla Tires Ltd., the corporate debtor, is permitted,” said an NCLT bank his appointment was approved on May 5, 2022.
Also, the NCLT bench, consisting of (technical) member Harish Chander and (judicial) member Suri Rohit Kapoor, has criticized firm BK Birla Group for making a “very casual attempt” to adjourn the matter to apply.
In this regard, the NCLT notified Biral Tires of SRF’s request on October 20, 2021.
On December 22, 2021, Birla Tires sought some time to submit a response and requested an adjournment. On February 28, 2022, the BK Birla group company again asked for a little more time and NCLT granted them two weeks.
On April 5, 2022, at the next hearing, Birla Tires again applied for another extension citing some disruption at its facility, which was denied by the NCLT and reserved the order.
“Considering that this issue under the IBC, in which the Code is precisely aimed at completing the insolvency proceedings in a timely manner in order to maximize assets, to grant adjournment after adjournment, and also to do so without any basis, is therefore not permissible by the adjudicating authority and this adjudicating authority therefore declined to further extend the deadline for the corporate debtor to submit an affidavit,” it said.
The facts on file indicate that Birla Tires was given a reasonable opportunity to submit its affidavit but failed to do so despite repeated opportunities. L
