Gini & Jony kidswear brand to undergo insolvency proceedings
Indian kid’s fashion brand Gini & Jony, promoted by Lakhani brothers, will undergo corporate insolvency resolution process after the Mumbai bench of National Company Law Tribunal (NCLT) admitted an insolvency application against the company. The insolvency petition was filed by operational creditor Pooja Clothing Pvt Ltd after the Mumbai-based Gini & Jony defaulted on a payment of Rs 76.38 lakh.
According to the submission of the petitioner, pursuant to various purchase orders, it supplied goods after required inspection and clearance and to the satisfaction of the Gini & Jony (Corporate Debtor) and raised invoices totalling to Rs. 1.29 crore from 16 February 2018 to 16 November 2018 and raised debit notes and issued credit notes and received on account payment, all three combined totalling to Rs. 52.47 lakh leaving outstanding amount of Rs. 76.38 lakh.
The corporate debtor had made the last payment on 11 January 2019 for a sum of Rs 5 lakh. Thereafter, the operational creditor persistently followed up for the outstanding payments with the Corporate Debtor number of times via telephonic calls, personal visits and e-mails but the Corporate Debtor was reluctant in complying with their mail for releasing the outstanding payment.
The operational creditor served demand notice dated 4th September on Corporate Debtor demanding the payment of outstanding dues of Rs. 76.38 lakh along with interest amounting to Rs. 22.31 lakh and GST thereon Rs 4 lakh totalling to Rs 1.02 crore
The demand notice dated 4th September 2019, sent through speed post-dated 6th September 2019, was received by the Corporate Debtor on 9th September 2019.
There was neither any Notice of Dispute raised by the Corporate Debtor nor any credit was received from the Corporate Debtor within 10 days from the date of receipt of the Notice on 9th September, 2019 and even thereafter till date.
The corporate debtor – Gini & Jony – in its submission against the insolvency petition said that there was a pre-existing dispute over the amount due. It also contended that as per MSME Act, it is not supposed to pay Rs 22.31 lakh in interest for delayed payment. It also contested that since the operational creditor was not registered under GST at the time of the transactions, therefore interest along with GST was wrongly claimed.
The NCLT in its order observed that there was no dispute on the defaulted amount of Rs 76.38 lakh, and that it was more than Rs 1 lakh threshold for initiation of insolvency proceedings at the time of filing the petition. Therefore, the tribunal allowed the initiation of the insolvency petition against the company.
Gini & Jony is an Indian kid’s fashion brand, promoted by the Lakhani brothers since 1980. The brand sells apparel through a mix of company-owned and franchisee outlets, and is currently present in 106 cities with 200 exclusive brand outlets and other large format multi-brand stores, like Shoppers Stop, Lifestyle Stores, Pantaloons etc.
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