NCLT initiates insolvency proceedings against NTC
NEW DELHI: The National Company Law Tribunal (NCLT) has ordered initiation of insolvency proceedings against state-run National Textile Corp. Ltd (NTC) after admitting a plea by one of its operational creditors claiming default of around ₹14 lakh.
The New Delhi bench of NCLT has also appointed Amit Talwar as an interim resolution professional (IRP), suspending the board of NTC and has also declared a moratorium against the PSU as per the provisions of the Insolvency and Bankruptcy Code.
A two-member NCLT bench also rejected the claims of NTC and said the dispute it raised over the due amount claimed by its operational creditor is merely a “moonshine dispute” and said default has occurred for the payment.
NTC is under the jurisdiction of the Union ministry of textile. It is engaged in the production of yarn and fabric through its 23 mills in operation, located all over India.
The NCLT direction came over a petition filed by Hero Solar Energy Pvt. Ltd (HSEPL) through its counsel Pallav Mongia, claiming a default of ₹13.84 lakh for two contracts for installing solar rooftop power projects.
The matter relates to an almost six-year-old contract. NTC had awarded a work order in May 2016 in Tamil Nadu for a total 780 kWp grid-connected rooftop solar power PV system.
As per the contract of both the projects, the amount of ₹2.21 crore towards Project 1 and ₹1.86 crore towards Project 2 become due upon the completion of work on December, 2016 and April, 2017, respectively.
However, NTC failed to release the complete payment due to HSEPL and retained an amount of ₹13.84 lakh against the terms of the agreement. It was informed by the operational creditor that as per the clauses of the agreement, there was no provision for levying any penalty and sent a demand notice to NTC under section 8 of the IBC.
However, NTC in its reply had said HSEPL has committed a delay of 117 days in the execution of the work order and it has suffered losses and hence it has deducted penalties from the amount due.