Sintex Plastics settles vendor’s dues; may escape insolvency proceedings
Sintex Plastics Technology, the Kalol, Gujarat-based listed company, has reached a settlement with operational creditor Zielen Industries Private Ltd and might be able to save itself from the ongoing insolvency proceedings.
The National Company Law Appellate Tribunal (NCLAT), which was approached by the corporate debtor for relief from the insolvency proceedings, has asked it to seek NCLT’s permission for exit from the corporate insolvency resolution process (CIRP).
Passing the order, the NCLAT observed that keeping in view the dictum of the Apex Court in “Swiss Ribbons and Ors. V. Union of India & Ors”, the Corporate Debtor may avail the opportunity of seeking exit from corporate insolvency resolution process (CIRP) at the stage of pre-constitution of COC but whether the same takes care of interest of all the stakeholders involved and can be permitted is a decision to be taken by the Adjudicating Authority on the peculiar facts of the case.”
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The NCLAT, therefore, said that it would be appropriate for the appellant to approach the adjudicating Authority to seek exit from CIRP by filing the terms of settlement and the Adjudicating Authority will have to pass the appropriate order.
The Ahmedabad bench of the NCLT had on 18 December admitted the insolvency application against Sintex Plastics Technology Ltd filed by Zielen Industries.
The settlement between the two parties was reached on 26 December, 2020.
The only issue with the withdrawal of the application was that the case had already been admitted and the settlement between the two parties was reached after admission of the case in NCLT. However, the argument made by cousel of Sintex Plastics is that the settlement was reached before the formation of CoC and hence there is a provision to withdraw the insolvency application. The NCLAT agreed with the appellant’s submission and asked it to approach NCLT while directing the interim resolution professional from not constituting CoC for a week.
Sintex Plastics had defaulted on a payment of Rs 40.68 lakh to Zielen Industries.
