Home/ Markets / Stock Markets/  NCLT rejects Yatra plea to dismiss Ezeego’s insolvency petition

MUMBAI : The National Company Law Tribunal (NCLT) has dismissed an application by Yatra Online against its operational creditor Ezeego One Travel that sought to initiate insolvency resolution against the former.

Ezeego had filed the insolvency application under Section 9 after Yatra defaulted on its dues. A bench led by Justice Kishore Vemulapalli and Justice Prabhat Kumar rejected the application filed by Yatra challenging maintainability of Ezeego’s insolvency application. Following the dismissal, Yatra’s insolvency case will be now heard on merits by NCLT.

“We find that there exists a debt and (a) date of default, (it) is not 30 October 2020 but falls in July 2019 i.e. the month in which the agreement between the parties was terminated. Hence, the present interlocutory application is not maintainable, and we do not find any merit in the contention of the corporate debtor that the application under Section 9 of the Code is barred by provisions of Section 10A of the Code," the tribunal said in a 17 March order that was uploaded on its website on Tuesday.

In its petition before the NCLT, Yatra Online, represented by senior advocate Krishnendu Dutta, sought dismissal of Ezeego’s application for insolvency resolution against Yatra. Dutta argued that the application was not maintainable on account of being barred by Section 10 A of the IBC. Section 10A of IBC barred filing of insolvency applications for defaults that occurred between March 2020 and March 2021, a period exempted due to widespread disruptions caused by the pandemic. Dutta informed the court that operational creditor had filed the insolvency application alleging that an amount of 3.15 crore is due and payable by Yatra, and stated the date of default as 30 October 2020 in the application. Dutta argued that since the date of default as stated in the insolvency application was under the barred period under Section 10A for initiation of insolvency, the application was not maintainable.

Moreover, he also submitted that once the operational creditor himself has stated the date default which occurs during the suspension period, the bar under Section 10A will inevitably apply. In response, Nausher Kohli, representing Ezeego, said it is incumbent upon the NCLT to determine the true date of default instead of going on the basis of the pleadings filed by the parties.

Kohli drew the bench’s attention to a ledger statement sent by Yatra admitting the debt of 1.59 crore via an email dated 15 November 2021.He said it showed the balance is outstanding since 1 April 2019 onwards, which was before the Section 10A period.

After hearing the parties, the bench agreed with the submission of Kohli that it was dutybound to ascertain the facts relating to debt and default correctly and cannot allow Yatra to take advantage of mistakes by Ezeego. Since Yatra admitted its liability on a date prior to the prohibited period, the NCLT Mumbai dismissed the application by Yatra.Since Yatra admitted its liability on a date prior to the prohibited period, the NCLT Mumbai dismissed the application by Yatra.

Priyanka Gawande
Priyanka Gawande is a senior legal correspondent at Mint. She has worked as legal reporter for four years with both television and digital mediums. Based in Mumbai, she reports on disputes across sectors including banking, corporates and finance. This also includes insolvency and bankruptcy cases and intellectual property rights (IPR) litigation. Her focus also comprises tracking capital markets and disputes relating to securities law. Previously, Priyanka worked with Informist Media for 2.5 years covering major insolvency and bankruptcy cases and corporate developments. She started her career in journalism with Business Television India (BTVi) where she reported on primary markets, banking, finance and insurance companies.
Know your inner investor Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach.
Take the test
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Updated: 21 Mar 2023, 09:37 PM IST
Recommended For You

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started
Get alerts on WhatsApp
Set Preferences My Reads Watchlist Feedback Redeem a Gift Card Logout