Homeshop18 to face insolvency proceedings
Television Home Shopping Network Limited, an e-commerce marketplace in India under the brand name HomeShop18, will face corporate insolvency resolution process (CIRP) after the Mumbai bench of NCLT allowed an insolvency petition against the company filed by vendor Treasure Retail Pvt Ltd. Treasure Rretailed moved NCLT against HomeShop18 after the latter defaulted on a payment of Rs 1.39 crore.
The operational creditor (Treasure Retail) entered into an arrangement with Homeshop18, wherein it agreed to allow the operational creditor to demonstrate, market and sell their product(s) to customers(s) through Homeshop18 platform and obtain other associated services on the terms and conditions agreed upon.
The operational creditor supplied products to consumers across India who placed orders through an e-commerce platform of the corporate debtor. The Corporate Debtor collected payment from the said customers and the Operational Creditor had authorized the Corporate Debtor to deduct commission/fees and other agreed charges/amounts such as taxes, refunds, shipping charges, freight charges and payment collection expense from the Purchase Price received from the Customer prior to remitting such payments to the Operational Creditor as per the arrangement agreed upon between the Operational Creditor & Corporate Debtor.
Intermittently, the Corporate Debtor released payments on account basis which Operational Creditor has adjusted on FIFO basis. However, an amount of Rs. 1,38,68,571 remained unpaid by the Corporate Debtor.
As a result, the Operational Creditor addressed a notice to the Corporate Debtor under Section 8 of the Insolvency and Bankruptcy Code 2016 demanding the unpaid operational debt within a period of 10 days from the date of receipt of the Notice.
HomeShop18 admitted that a payment of Rs. 103,91,586 is outstanding which is also reflected in the ledger account of the operational creditor in the books of account of the Corporate Debtor.
Homeshop18 has further claimed in NCLT that during the pandemic its operations were largely non-functional, and many officials of the respondent have either left the organization due to which some appropriate documents could not be collected for the purpose of filing the reply.
The NCLT in its order conclude that this admission made in the reply clearly reveals that the corporate debtor has not effectively controverted the claim of the Operational Creditor that a sum of Rs. 1.38 crore (including interest) was outstanding. The tribunal, therefore, admitted the insolvency application against the Homeshop18 and appointed Sandeep Goel as the interim resolution professional in the case.
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