The bankruptcy court has allowed Edelweiss Asset Reconstruction Co’s petition, seeking to initiate insolvency proceedings against S Kumars, and has appointed Anjan Bhattacharya as its interim resolution professional.
The ARC had approached the Mumbai bench of the National Company Law Tribunal (NCLT) against the over seven-decade-old textile maker and leader in the school uniform fabric segment, after it defaulted on dues of more than Rs 414 crore.
“The corporate debtor (S Kumars) has not objected to, nor denied, the existence of the debt which is in default,” the division bench of Justice PN Deshmukh and technical member Shyam Babu Gautam observed in the order on November 18.
The tribunal noted that the debtor had made a settlement proposal on July 18, 2020 and a revised one on August 12, 2020, but had failed to make the payment. “The debtor companies were reworking on the settlement proposal diligently and were serious to settle the dues.”
S Kumars had given corporate guarantee to a loan taken by a subsidiary, SKM Fabrics, from Central Bank of India in 2009. The loan was declared a non-performing asset on June 30, 2010, and the ARC acquired the right to recover the debt in March 2014.
Counsel Rohan Agarwal, along with Nishit Dhruva of law firm MDP & Partners, appearing for the lenders, argued that the petition was complete in all respects and that the default had been corroborated by substantial evidence.
