The Mumbai bench of the National Company Law Tribunal (NCLT) on Friday admitted a plea seeking insolvency process against Compuage Infocomm.
Plus Plus Unified Engagement, one of the financial creditors to the company, moved Section 7 application under the Insolvency and Bankruptcy Code to initiate insolvency proceedings against the company.
Section 7 petition was invoked by the creditor for resolution of an unresolved financial outstanding amount of ₹1.7 crore as on 31 March 2022.
Compuage is a distributor in the information technology and mobility space catering to resellers, retailers, brand stores, and system integrators in India. Plus Plus is in the business of consulting, advertising, publicity, sales promotion, public relations, market and sales research and other allied activities.
A bench led by Justices Kuldip Kumar Kareer and Anuradha Bhatia admitted the petition and appointed Arun Kapoor as the interim resolution professional to oversee the day-to-day affairs of the company. The court has also asked the financial creditor to deposit ₹5 lakh towards the initial corporate insolvency resolution process (CIRP) costs.
According to the order, Compuage through its directors had approached and requested the financial creditor to advance a short-term loan for its working capital requirement.
The creditor stated that it was mutually agreed and decided that Plus Plus shall provide an intercorporate loan amounting to ₹3.65 crore to the company as per the terms and conditions of the loan agreement dated 2 August 2021.
The company’s directors Atul Mehta and Bhavesh Mehta had also executed ‘guarantee deeds’ in favour of the financial creditors guaranteeing jointly and severally the repayment of the said loan.
Subsequently, Compuage repaid an amount of ₹2 crore by October 2021 and continued to pay the interest amount on a quarterly basis.
Nausher Kohli, representing the financial creditor, informed the tribunal that despite repeated requests for loan repayment the company did not make any payments.
Later, while responding to some letters, Compuage said that it was facing financial difficulties. However, it agreed to make the payments by January 2023.
The financial creditor as well as the company tried to settle the issue, but since there was no positive outcome of the meetings, the financial creditor sent a legal notice dated 6 March 2023 to the corporate debtor (Compuage).
The company received that notice but did not reply to the same and failed and neglected to pay the outstanding amount to the creditor. This led to the company being dragged into insolvency.
Meanwhile, Bijal Rathod, the counsel appearing for Compuage, denied all the allegations and averments made in the company petition filed by the financial creditor against the corporate debtor.
The counsel submitted that the financial creditor had failed to establish any default in respect of the Inter-corporate loan facility against the company.
