The NCLAT has dismissed the bankruptcy suit filed against Hinduja Leyland Finance

NCLAT has rejected the application of Hinduja Leyland Finance Limited to initiate bankruptcy proceedings against its creditor Fly Express Logistics. A three-member bench of the Appellate Tribunal upheld the earlier order of the Allahabad Bench of the National Company Law Tribunal (NCLT), which was on April 5, 2022, rejecting the application of Hinduja Leyland Finance.

The NCLT stated that the default date was December 24, 2022, which falls within the prohibition period specified in Section 10A of the Bankruptcy and Insolvency Code (IBC) and that no petition can be filed to initiate the Corporate Insolvency Resolution Process (CIRP). A default is occurring during this period.

Hinduja Group Firm challenged before the National Company Law Appellate Tribunal (NCLAT) that December 24, 2022 was incorrectly mentioned as default date in the petition before the NCLT. It wanted to file an amendment application but since the NCLT rejected the application on the first day of the hearing, it could not do so, Hinduja Leyland Finance claimed.

However, the appellate tribunal also rejected the application of Hinduja Leyland Finance after explicitly citing December 24, 2022 as the date of default.

“We have examined the section 7 application” as specified in the date of default “Part-IV” dated 24.12.2022 so the Judicial Authority (NCLT) did not err in rejecting the application, thus we find no basis for recreation. Appeal, ”said a bench headed by Chairperson Justice Ashok Bhushan.

However, it further states that Hinduja Leyland has the freedom to initiate a new process under Section 7 on appropriate instruments under the Finance Act.

Under section 7 of the IBC, a financial creditor can initiate bankruptcy proceedings against the corporate debtor concerned.

On November 12, 2008, incorporated Hinduja Leyland Finance provided loans for the purchase of commercial and personal vehicles for used vehicles in the primary and secondary markets.

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