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Insolvency proceedings will start against National Textiles Corporation, NCLT approves

New Delhi, May 29 (Agency)

The National Company Law Tribunal (NCLT) has ordered initiation of insolvency proceedings against state-owned textile firm National Textile Corporation (NTC) after allowing a plea by lender HSEPL. The Delhi bench of the NCLT has suspended the board of NTC and appointed Amit Talwar as interim resolution professional (IRP). The bench also announced an adjournment against NTC in accordance with the provisions of the Insolvency and Bankruptcy Code (IBC).

A two-member bench of the NCLT also dismissed NTC’s claims, saying that the dispute over the amount claimed by its operational creditor was just a “forcibly created dispute” and defaulted in payment of about Rs 14 lakh. happened. This is perhaps the first time that the IBC Act has been invoked against a public sector company after its implementation.

NTC comes under the Ministry of Textiles, Government of India. It is engaged in the production of yarn and fabric through its 23 mills located all over the country. The NCLT has given directions to initiate insolvency proceedings against NTC on a petition filed by Hero Solar Energy Private Limited (HSEPL).

this is the case

HSEPL, in its petition, had claimed default in payment of Rs 13.84 lakh for two contracts for setting up a solar rooftop project for NTC. The matter pertains to a six-year-old contract. In May 2016, NTC had awarded the contract for setting up rooftop solar projects in Tamil Nadu with a total capacity of 780 kW. As per the contract for these two projects, an amount of Rs 2.21 crore for the first project and Rs 1.86 crore for the second project was to be given on completion of work on December, 2016 and April, 2017 respectively. But NTC failed to make full payment of this contract amount to HSEPL and an amount of Rs 13.84 lakh remained outstanding against the terms of the agreement. Taking this arrear amount as the basis, HSEPL in its petition seeking direction to initiate insolvency proceedings.

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