The National Company Law Tribunal (NCLT) has admitted Indian Overseas Bank’s petition seeking initiation of a corporate insolvency resolution process against textile manufacturer Shrivallabh Pittie South West Industries.
The tribunal appointed Avil Menzes as the interim resolution professional to take over the day-to-day affairs of the company.
Indian Overseas Bank, one of the financial creditors, had dragged the debt-laden firm to NCLT over non-payment of dues after it failed to make a payment of Rs. 73.92 crore to the bank.
According to the order, the lender’s consortium, including the bank, and the company executed a working capital consortium agreement in March 2012.
Pertinently, Shrivallabh Pittie repeatedly defaulted in repaying the amount due and payable under the working capital facility, and was declared as a non-performing asset (NPA) in March 2022.
The bank recalled the facility and demanded payment of an outstanding amount of Rs. 69 crore within ten days. The company, however, gave frivolous reasons for non-payment of the outstanding amount but never denied the obligation to pay. The company’s dues stood at a total of over Rs.73 crore, the order showed, and the bank filed the petition based on this.
