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In the Birla Tyres case filed by chemicals firm SRF, National Company Law Tribunal (NCLT) has ordered the initiation of insolvency proceedings. SRF, which is an operational creditor of the BK Birla group firm, said that Birla Tyres defaulted on payment of 15.84 crore for the supply of Tyre Cord Fabric as of July 8, 2021.

On Monday, the NCLT bench appointed Seikh Abdul Salam as Interim Resolution Professional (IRP) to run the operations of the company after board was suspended. NCLT has also declared a moratorium as per the procedures of the Insolvency & Bankruptcy Board. 

Regarding the case, the tribunal said it was "satisfied upon the basis of documents", including pleadings of parties as "default has occurred" and observed there is no payment of the unpaid operational debt and also there is an admission of this by Birla Tyres, the corporate debtor.

"The application bearing... filed by SRF Ltd, the Operational Creditor, under section 9 of the Insolvency & Bankruptcy Rules, 2016 for initiating CIRP against Birla Tyres Ltd, the Corporate Debtor, is admitted," said an NCLT bench in its order passed on May 5, 2022. Besides, the NCLT bench also rebuked the BK Birla group firm for taking a "very casual attempt" to seek adjournments in the matter.

In this matter, the NCLT had issued notice to Biral Tyres on October 20, 2021, over SRF's plea. On December 22, 2021, Birla Tyres sought some time to file a reply and sought adjournment. Again on February 28, 2022, the firm sought some more time, for which NCLT granted them two weeks.

On April 5, 2022, at the next hearing, Birla Tyres again sought a further extension on the pretext of some disruptions at its factory premise, which was rejected by the NCLT and has reserved the order.

 

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