Construction firm Ahluwalia Contracts has entered into a settlement agreement and resolved the payment issues with its operational creditor, A2 Interiors Products Pvt Ltd, and is filing an application to withdraw the insolvency proceedings.
On May 5, the Delhi-based bench of the National Company Law Tribunal (NCLT) had allowed the insolvency plea filed by A2 Interiors Products Pvt Ltd, an operational creditor, against Ahluwalia Contracts claiming default of Rs 14.10 crore and had appointed an interim resolution professional (IRP).
The IRP has been informed about the development and the company has requested him not to proceed to start the Corporate Insolvency Resolution Process (CIRP), Ahluwalia Contracts India Ltd said in a regulatory filing.
“Nevertheless, the matter has been amicably resolved and settled with the Applicant M/s A2 Interiors Products Pvt Ltd, who has, in turn, filed the requisite Form FA dated May 8, 2021, with the IRP informing him regarding the settlement and requesting him to refrain from proceeding with the CIRP in view of the withdrawal application,” the construction firm said.
Both the parties are now filing an application under section 12A of IBC for the withdrawal of insolvency proceedings.
“The steps to file an application under Section 12A of the Insolvency and Bankruptcy Code, 2016 for Withdrawal of the Admitted application are underway. The Parties have also agreed to take all requisite and necessary steps for getting the order dated May 5, 2021, set aside, jointly,” it said.
Under Section 12A of the Insolvency & Bankruptcy Code (IBC), NCLT can permit withdrawal of ongoing insolvency against a company over an application with the consent of creditors, even after admission of cases against them.
Ahluwalia Contracts had engaged A2 Interiors Products for interior, furnishing and allied civil and electrical works at various project sites. It had supplied materials to Ahluwalia Contracts as part of various work orders issued for six projects at different locations in the country.
It had raised invoices against each work order, which were duly received by Ahluwalia Contracts, however, it failed to release the full payment.
Later, in May 2019, A2 Interiors had issued a notice to Ahluwalia Contracts under the Insolvency & Bankruptcy Code (IBC) demanding Rs 12.54 crore along with an interest of 18 per cent per annum, which was rejected by Ahluwalia Contracts in its reply and raised disputes.
Following this, A2 Interiors approached the NCLT under section 9 of IBC, which allows operational creditors to file an insolvency plea, claiming a total outstanding debt of Rs 14.10 crore against Ahluwalia Contracts.
