The National Company Law Appellate Tribunal (NCLAT) has stayed the formation of the Committee of Creditors (CoC) for Bombay Rayon Fashion until further notice.
The appellate tribunal has clarified that the Corporate Insolvency Resolution Process (CIRP) proceedings shall be continued and the resolution professional will have to keep the company as going concern under the Insolvency & Bankruptcy Code (IBC).
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The NCLT had allowed a petition filed by an operational creditor of Bombay Rayon Fashions and had appointed Santanu T Ray of AAA Insolvency Professionals as its resolution professional.
During the course of the hearing at the appellate tribunal, the counsel for Vikash Parasprampuria of Chiranjilal Yarn Traders, whose petition was originally admitted by the NCLT informed that they are willing to settle the matter if the company pays its dues along with the legal cost.
As per a stock exchange filing, the company had reported a net sale of Rs 108.77 crore and a loss of about Rs 300 crore in fiscal 2021. In its June 7 order, NCLT had restrained Bombay Rayon executives from transferring, encumbering, alienating or disposing of the company’s assets.
“Corporate debtor (BRFL) had time and again by its letter, invoices and by making part payment acknowledged its liability. Therefore, the petition made by the creditor is complete in all respects as required by law,” said NCLT division bench in its order of June 7. “Therefore, we find that it is a fit case for initiation of CIRP.”
