In the Birla Tires case filed by chemical company SRF, the National Company Law Tribunal (NCLT) ordered the opening of insolvency proceedings. SRF is the operational creditor of the BK Birla group company.
Following this, the NCLT bench appointed Seikh Abdul Salam as an Interim Resolution Professional (IRP) to lead the operations of the company after the suspension of the board. NCLT has also declared a moratorium in accordance with Insolvency & Bankruptcy Board procedures.
SRF said Birla Tires defaulted on payment of ₹15.84 crores for the supply of tire cord fabric as of July 8, 2021.
Regarding the case, the court said it was “satisfied based on documents” including the parties’ pleadings as “a defect has occurred” and observed that there is no no payment of outstanding operational debt and that Birla Tires has also admitted this. , the debtor company.
“The claim for … filed by SRF Ltd, the operating creditor, under Section 9 of the Insolvency and Bankruptcy Rules, 2016 to initiate CIRP against Birla Tires Ltd, the corporate debtor, is successful,” said an NCLT bench in its order adopted on May 5, 2022. Further, the NCLT bench also faulted the BK Birla Group company for making a “very flippant attempt” to seek adjournments in the case.
In this matter, the NCLT had issued a notice to Biral Tires on October 20, 2021, regarding SRF’s plea. On December 22, 2021, Birla Tires requested an extension to file a response and requested an adjournment. Again on February 28, 2022, the firm asked for a bit more time, for which NCLT gave them two weeks.
On April 5, 2022, at the next hearing, Birla Tires again requested a further extension on the pretext of some disturbances at its factory premises, which was rejected by the NCLT and reserved the order.