However, the appellate tribunal has clarified that the Corporate Insolvency Resolution Process (CIRP) proceedings shall be continued and the resolution professional will have to keep the company as going concern under the Insolvency & Bankruptcy Code (IBC).
Earlier, the NCLT had allowed a petition filed by an operational creditor of
and had appointed Santanu T Ray of AAA Insolvency Professionals as its resolution professional. However, Prashant Agrawal, a member of the company’s suspended board, had decided to appeal the ruling at the appellate tribunal.
During the course of the hearing at the appellate tribunal, the counsel for Vikash Parasprampuria of Chiranjilal Yarn Traders, whose petition was originally admitted by the NCLT informed that they are willing to settle the matter if the company pays its dues along with the legal cost.
While, advocates Abhijeet Sinha and Nausher Kohli, appearing for Agrawal informed the tribunal that they will seek the instruction from the petitioner in this regard.
On Jun 15, the division bench of Justice M. Venugopal and Kanthi Narahari of NCLAT, after hearing the arguments adjourned the case further to July 7 and directed a stay on the formation of the CoC.
As per a stock exchange filing, the company had reported a net sale of Rs 108.77 crore and a loss of about Rs 300 crore in fiscal 2021.
In its June 7 order, NCLT had restrained Bombay Rayon executives from transferring, encumbering, alienating or disposing of the company’s assets.
“Corporate debtor (BRFL) had time and again by its letter, invoices and by making part payment acknowledged its liability. Therefore, the petition made by the creditor is complete in all respects as required by law,” said an NCLT division bench of members Kishore Vemulapalli and Rajesh Sharma in its order of June 7. “Therefore, we find that it is a fit case for initiation of CIRP.”
Since the inception of the Insolvency & Bankruptcy Code, several textile and clothing brands — including
, , Reid & Taylor India, S Kumars Nationwide, Mandhana Industries and Provogue — have been referred for debt resolution.
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