NCLT Mumbai Approves Withdrawal Of Insolvency Proceedings Against Syska LED Lights After Settlement
Rajesh Kumar
22 May 2024 12:45 PM IST
The Mumbai bench of the National Company Law Tribunal (NCLT) of Justice Virendra Singh Bisht (Judicial Member) and Prabhat Kumar (Technical Member) has approved the withdrawal of the Corporate Insolvency Resolution Process (CIRP) initiated against Syska LED Lights Pvt Ltd. This decision was made after a settlement agreement was reached between Syska and its operational creditor,...
The Mumbai bench of the National Company Law Tribunal (NCLT) of Justice Virendra Singh Bisht (Judicial Member) and Prabhat Kumar (Technical Member) has approved the withdrawal of the Corporate Insolvency Resolution Process (CIRP) initiated against Syska LED Lights Pvt Ltd. This decision was made after a settlement agreement was reached between Syska and its operational creditor, Neeraj Singh, proprietor of NJ Electronics.
Syska LED Lights, a key player in the LED lighting solutions market and part of the Pune-based SSK Group, had previously been admitted into the insolvency resolution process following an application by its operational creditor. The SSK Group is renowned for being the exclusive distributor of Samsung mobiles, accessories, and tablets across five states in Western India.
The insolvency petition was filed by Neeraj Singh, representing NJ Electronics, under Section 9 of the IBC. NJ Electronics, based in Noida, Uttar Pradesh, manufactures various electronic components, including transformers and inductors, which were supplied to Syska LED Lights. Despite an initially smooth business relationship, payment delays began in December 2022, leading to the non-payment for supplied goods and the dishonoring of eight post-dated checks issued by Syska LED Lights.
The petition highlighted that Syska LED Lights had defaulted on payments totaling INR 1,26,75,456, which included a principal amount of INR 1,14,20,193 and accrued interest of INR 12,55,262 up to October 31, 2023. NJ Electronics sent a demand notice on November 1, 2023, which Syska responded to on November 11, 2023. Despite Syska's willingness to settle the debt by offering demand drafts, NJ Electronics decided to proceed with the insolvency application due to concerns over Syska's past payment track record.
On May 7, 2024, the NCLT, satisfied with the evidence of default, admitted the petition and initiated the CIRP against Syska LED Lights. Ravi Prakash Ganti was appointed as the interim resolution professional (IRP), and a moratorium was declared under Section 14 of the IBC, restricting legal actions against Syska LED Lights and the transfer of its assets.
Following the admission of the insolvency petition, Syska LED Lights and NJ Electronics continued negotiations, resulting in a settlement agreement executed on May 7, 2024. The joint application for withdrawal was presented to the NCLT on May 9, 2024.
During the hearing on May 9, the division bench reviewed the joint application for withdrawal submitted by both the operational creditor and Syska LED Lights. The bench acknowledged the settlement and held that the corporate debtor should be taken out of the CIRP. Consequently, the resolution professional was directed to hand control back to Syska LED Lights.
Case Title: Ms. Neeraj Singh Proprietor Of M/S. N.J. Electronics Vs Syska Led Lights Private Limited
Case Number: IA 2297/2024 in C.P. (IB)/63(MB)2024
Click Here To Read/Download Order or Judgment
