NCLT closes insolvency proceedings against V2 Retail after settlement

The National Company Law Tribunal has closed insolvency proceedings against V2 Retail after operational creditor settled payment-related dispute with the company.

A two-member bench of the NCLT allowed the application filed by the Interim Resolution Professional (IRP) of V2 Retail to withdraw the Insolvency petition against the company after the settlement with the creditor.

The NCLT approved the settlement after it perused the averments made in the application, as well as the settlement agreement enclosed with the application and IRP received his expenses.

"Under such circumstances, we think it is proper to approve the settlement. Accordingly, we hereby allow the prayer of the IRP and the company petition stands dismissed as withdrawn and the order dated June 25, 2020, by the CIRP was ordered to be initiated in the present matter is hereby set aside," said the NCLT in its order dated July 10.

Earlier on June 25,the NCLT had admitted a plea against V2 Retail Ltd by Totem Media Solutions and directed to initiate insolvency proceedings against it. The tribunal had also appointed an interim resolution professional to start the insolvency resolution process of the retailer.

The NCLT direction had come over a plea filed by Totem Media Solutions, a company engaged into the sale of advertising printing space, claiming a default totalling to Rs 86.61 lakh along with the interest.

V2 Retail had contested the claims arguing that higher amount was charged from it for publication of advertisement.

However, the tribunal had rejected the claims of V2 Retail, saying that it had raised no dispute over the invoice notice sent by the operational creditor.

"It has been established by the operational creditor that there is no payment of the operational debt, the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor and no notice of dispute has been received by the operational creditor within 10 days of receipt of demand notice," the NCLT had said.

On June 30, in an update to the stock exchanges, V2 Retail said it has been intimated by the resolution professional about the commencement of corporate insolvency resolution process.

"In view of the Section 17, 18 and 20 of the Insolvency and Bankruptcy Code, 2016, the powers of the Board of Directors of Corporate Debtor shall stand suspended and such powers shall be vested with Mr Amit Gupta, an insolvency professional," V2 Retail had said.

V2 Retail, promoted by Ram Chander Agarwal, had reported a revenue of Rs 701.22 crore for FY 2019-20.