Sahara Hospitality escapes insolvency proceedings by paying Rs 8 cr to creditor
The insolvency application filed against Sahara Hospitality has been withdrawn by operational creditor Delta Electro Mechanical Private Ltd. under Section 12A of the Insolvency and Bankruptcy Code (IBC).
The two parties have decided to settle the issue after Sahara Hospitality agreed to pay a sum of Rs 8 crore in three instalments as full and final settlement of all its outstanding dues as on the date of signing of the consent terms.
Counsel appearing for the operational creditor informed the Mumbai bench of the National Company Law Tribunal (NCLT) on 28 July 2022 that the entire amount as indicated in the settlement agreement has been received by the Operational Creditor.
The insolvency petition against Sahara Hospitality was filed by Delta Electro Mechanical Private Ltd for defaulting on a payment of Rs 51.77 crore.
The Operational Creditor and Sahara Hospitality had agreed to settle the claim for an amount of Rs. 20 Crores to be paid in 14 monthly instalments. Accordingly, terms of Settlement dated 23 April 2019 were executed between the parties.
The said terms of settlement were submitted to NCLT and accordingly the tribunal in its order dated 30 April 2021 had disposed of an earlier petition with a liberty to the operational creditor to approach the tribunal in case of breach of the settlement terms.
Thereafter, the Operational Creditor filed another petition seeking revival of the insolvency petition. The Corporate Debtor then approached the Operational Creditor and requested the Operational Creditor to settle the matter by drawing a second terms of settlement among the parties.
The second terms of settlement were drawn between the parties on 21 November 2019, according to which, Sahara Hospitality agreed that in an event of default of payment, the said default would be cured within a period of 10 days. The Corporate Debtor in case of default also agreed to pay the Operational Creditor remaining amount by way of single installment within 30 days of such default.
However, despite executing the second terms of settlement, the Corporate Debtor failed to make the payment and chose to shrug off its liability to pay to the Operational Creditor stating that the insolvency application was infructuous.
But the NCLT admitted the insolvency petition on 15 July 2022, forcing Sahara Hospitality to reach another settlement by paying Rs 8 crore in two tranches.
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