In a significant development, the Gujarat High Court has provided temporary relief to the homegrown beverage brand Rasna by staying the National Company Law Tribunal (NCLT) order that directed the initiation of insolvency proceedings against the company. The NCLT's order, which was issued last week due to a default of Rs 71.27 lakh, had also suspended the board of Rasna and appointed an interim resolution professional.
The promoters of Rasna Industries immediately challenged the NCLT order in the High Court. On Monday, Justice V D Nanavati issued an ad-interim order staying the NCLT verdict until the appeal filed against it before the National Company Law Appellate Tribunal (NCLAT) is listed for hearing.
The NCLT had taken this action following a petition filed by one of Rasna's operational creditors, Bharat Road Carriers, which claimed a default of Rs 71.27 lakh. As part of the order, Ravindra Kumar Goyal was appointed as the Interim Resolution Professional (IRP).
Rasna's legal team expressed satisfaction with the High Court's decision, stating, "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 i.e., 01.09.2023 has been stayed in the first hearing held today, i.e. 04.09.2023 in the High Court."
Bharat Road Carriers had claimed operational debt of Rs 71.27 lakh, along with interest on service tax and interest on unpaid amounts, as of March 31, 2019. These claims were related to the transportation of various goods to Rasna, with invoices raised between April 2017 and August 2018.
Rasna acknowledged that they had indeed used transportation services from the carrier but pointed out that pre-existing disputes between the parties complicated the matter.
In November 2018, Bharat Road Carriers initiated a civil suit for damages amounting to Rs 1.25 crore in the commercial court in Ahmedabad. This case was later referred for mediation. However, the mediation process faced complications when the operational creditor failed to appear before the mediator.
The NCLT, in its order, noted that Rasna had not provided sufficient reasons for the dispute to the operational creditor. Therefore, it found that the operational creditor had established the existence of a default exceeding Rs 1 lakh.
In light of these findings, the NCLT concluded that it had no option but to proceed with the Corporate Insolvency Resolution Process (CIRP) concerning Rasna.
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