MT Educare faces insolvency proceedings for failing to pay Rs 5.5 crore to vendor
MT Educare Limited, an education support and coaching services provider, will face insolvency resolution process after the Mumbai bench of the National Company Law Tribunal (NCLT) admitted an insolvency application submitted by an operational creditor — Connect Residuary Pvt. Ltd, the company informed the exchanges.
MT Educare has defaulted on a payment of Rs 5.49 crore to the operational creditor which is in the business of renting of equipment or other assets.
The NCLT has appointed Ashwin Bhavanji Shah as the Interim Resolution Professional in the case.
MT Educare and Connect Residuary Pvt Ltd had entered into a Master Rental Agreement (MRA) under which the former had obtained use of certain assets like Servers Routers, Desktops, UPS, and other IT related (Collectively, Rented Assets) on rent basis from the latter during Jul 2019 and Jan 2020
In the contract, in consideration of payment of rent instalment to Connect Residuary, tutorial company was entitled to use Rented Assets for the agreed rent tenure as specified in each mentioned Rent Schedules.
From Jul/Aug 2019 onwards, MT Educare started committing default in payment of rent instalment and other monies. As a result, by end of March 2020 payment up to Rs. 1.32 crore (incl. GST) towards quarterly rent instalment were in default under 20 invoices.
Various follow-up emails sent to Respondent on In March of 2020 remained unanswered. Later, between Apr 2020 and Aug 2021, the operational creditor had issued several demand notices/reminders to MT Educare regarding payment default and called them to pay the outstanding rent instalment and other monies under the contract.
In between December 2020 and January 2021, the tutorial company returned certain Rented Assets to Connect Residuary which resulted in some damage/loss to Rented Assets returned. The applicant claimed a damage cost from MT Educare on 15 February 2021, which the latter did not dispute.
Meanwhile, MT Educare had proposed to applicant to consider revised rent rate to be made effective from January 2021 taking into account valuation of Rented Assets retained, the valuation ascribed by MT Educare, thereof, was Rs. 7,98,31,083.00. The revision was not accepted by Connect Residuary.
MT Educare, meanwhile, continued on payment default and forcing the vendor to issue a termination notice calling upon the former to pay the due amount.
Better knows as Mahesh Tutorial, the company is a listed tutorial and coaching service provider. It made Rs 68 crore in revenue in 2021-22 and made losses of Rs 25.52 crore.
Also Read: VHM Industries to undergo insolvency resolution process
