Despite repeated reminders Talwalkars fails to appear for insolvency hearings in NCLT
Despite the sword of bankruptcy hanging over Talwalkars Better Value Fitness Ltd, the company that owns a chain of gym seems to be least bothered about impending legal challenges ahead.
The company has repeated failed to send its counsel to hearings of insolvency application brought in by Axis Bank in the NCLT Mumbai bench. Axis Bank had filed an insolvency petition under Section 7 of the IBC against Talwalkars for its failure to pay Rs 66 crore to the bank.
The application was filed on 9 November 2020 and ever since the case has come up for hearing on three occasions. No representatives from Talwalkars showed up in any of these hearings.
On 23 November, the NCLT asked Axis Bank’s counsel to serve the notice upon the Corporate Debtor by way of physical delivery and by way of substituted service in English Newspaper (Business Standard) and in Marathi Language (Nav Shakti).
On 2 December 2020, Talwalkars did not send any representative for the hearing. Axis Bank’s lawyer told the NCLT that “irrespective of their all-out efforts and the fact that notice vide email was received, the Corporate Debtor has not appeared today”
The NCLT bench asked the Counsel of Axis Bank to ‘serve the notice clearly indicating next date of hearing through publication, before further proceeding in the matter’.
On 16 December 2020, Talwalkars again failed to send its representative to the NCLT for hearings. Axis Bank representative furnished proof of the notice served to the Corporate Debtor before the bench.
The NCLT directed the counsel for Axis Bank to again intimate the next date of hearing to the corporate debtor by all available means — registered post/speed post, hand delivery and email etc and file proof of service.
The NCLT made it clear that if the corporate debtor failed to appear on the next date of hearing, the matter would be heard on merits.
The case is up for hearing again on 13 January 2021. It remains to be seen if Talwalkars finally sends someone for the hearings or not.
In October, Talwalkars had informed the exchanges that it defaulted in payment of interest on loans from banks including Axis Bank, South Indian Bank and Andhra Bank to the tune of Rs 3.71 crore and Rs 1.28 crore in principal payment. Gross principal amount on which the default occurred stood at Rs 98.86 crore. The company has also defaulted on an NCD payment of Rs 2.38 crore in interest on a gross principal amount of Rs 25 crore.
