The National Company Law Appellate Tribunal (NCLAT) has set aside the insolvency proceedings initiated against Apeejay Surrendra group firm Apeejay Tea and directed to hand over the management back to its board of directors.
A three-member NCLAT bench set aside an earlier order passed by the Kolkata bench of the NCLT and asked the interim resolution professional (IRP) to handover all the assets and records of the company to its board.
The appellate tribunal observed that a suit was pending with regard to the claim over which insolvency order was passed by NCLT and now parties have settled the matter.
On October 18, 2019 the Kolkata bench of the National Company Law Tribunal (NCLT) had admitted an insolvency plea of an operational creditor of Apeejay Tea claiming dues.
"In view of the fact that there was a pre-existence of dispute and parties have settled the matter before the constitution of the Committee of Creditors(CoC), we set aside the impugned order dated October 18, 2019," said an NCLAT bench headed by Chairperson Justice S J Mukhopadhaya.
It further said:" In the result, the Corporate Debtor (company) is released from all the rigours of law and is allowed to function independently through its Board of Directors from immediate effect. The IRP will hand over the assets and records to the Board of Directors."
Apeejay Tea is among India's oldest and third largest tea producers. It had acquired Typhoo, the UK's third largest and an over 100-year-old iconic British tea brand in 2005.
Earlier, during the hearing counsel appearing on behalf of the appellant had submitted before NCLAT that there is a pre-existing dispute and a civil suit is pending with regard to the same claims. Therefore, application under Section 9 of the I&B Code was not maintainable.
He had also submitted that the company was ready to settle the matter.
On this submission, NCLAT had issued notices to the operational creditor and later an affidavit enclosing the copy of the terms of settlement dated November 6, 2019 was filed before it.
Moreover, the counsel appearing for the operational creditor also informed that they have settled the matter.
"From the Terms of Settlement' also, we find that there is a suit pending with regard to the same claim and parties have agreed to settle the matter," observed NCLAT.
Moreover, counsel representing IRP informed that the CoC has not been constituted and his fees and cost has also been settled.
"The appeal is allowed with aforesaid observations and directions," said NCLAT.