The Chennai bench of the National Company Law Tribunal (NCLT) has ordered the commencement of insolvency proceedings against Rayala Corporation Private Limited, in a case filed by seven financiers.
In their petition, the seven lenders have claimed an amount of about ₹30.23 crore due from the company.
The lenders said they had been providing finance since 2005 and the company had been paying interest so accrued.
ADVERTISEMENT
However, in the petition, they alleged that after 2013, the company had refused to pay its outstanding dues.
The lenders further stated that in 2016, the company paid a minimal part of the outstanding dues and communicated that it would not pay the remaining dues without stating the reason.
The company argued against the proceedings saying that the debt is time-barred and the application cannot be filed.
ADVERTISEMENT
However, NCLT rejected it, stating the amendments made to the Insolvency and Bankruptcy Code in June this year.
The Tribunal also rejected other reasons stated by the company, like the interest charged by the financiers being exorbitant, among others.
All conditions fulfilled
NCLT said the financiers had satisfied all the conditions under law and admitted the petition. It has appointed P. Sriram as an interim resolution professional.
According to the company’s website, Rayala Group is a ₹600 crore group, having diverse interests in light engineering industry, hospitality, real estate and scientific farming. It owns Rayala Towers, a 3,00,000 sq ft property in Anna Salai, which offers both commercial and office space.
Under the Insolvency and Bankruptcy Code, a maximum of 270 days is given for finding a suitable resolution plan for revival of the company.
If no resolution is found, the company goes under liquidation.