NCLT Delhi Directs Bira Beer Maker To Mediate With Creditors Over Insolvency Case Settlement

The Delhi bench of the National Company Law Tribunal (NCLT) has directed B9 Beverages Limited, the company behind the Bira 91 beer brand, its promoters, certain financial creditors, and applicants in connected insolvency proceedings to participate in a mediation meeting.

The meeting is aimed at exploring a possible settlement.

The order was passed in a Section 7 insolvency petition filed by Unity Small Finance Bank Limited against B9 Beverages.

The Special Bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Ravindra Chaturvedi passed the order on September 15.

Counsel appearing for B9 Beverages submitted that he was representing financial creditors who wanted to infuse funds into the company and revive it. He said settlement discussions were underway with the applicants in the various insolvency proceedings.

However, most creditors opposed the possibility of settlement. Unity Small Finance Bank questioned the seriousness of a ₹3 crore settlement offer against a debt of about ₹19.04 crore.

Axis Bank, however, informed the Tribunal that it had received a settlement offer and was considering it. Counsel for other applicants expressed concern that the settlement proposal was an attempt by B9 Beverages to buy time and pilfer its assets.

The Tribunal noted that the matter had remained pending for more than 10 months awaiting consideration for admission. It also took note of a shareholding chart produced by B9 Beverages' counsel.

The Tribunal observed that it could not see how the chart was relevant at that stage. It said the chart could be perceived only as an attempt to mislead the Tribunal on the issue.

Considering submissions that funds could be infused to revive the company, the NCLT directed counsel representing B9 Beverages, financial creditors willing to infuse funds and the promoters to meet the creditors' representatives at the office of mediator Eshna Kumar, Advocate, on September 17.

Applicants in all the connected proceedings and financial creditors seeking to revive the company were also directed to participate. The meeting was to be held in the presence of Eshna Kumar, who would mediate in the matter.

The Tribunal said no further indulgence would be granted if the meeting failed to result in a settlement.

It also directed that no assets of B9 Beverages be parted with amid some creditors' apprehension that they could be siphoned off. Counsel for the financiers seeking to revive the company were directed to carry an inventory of all the company's assets and provide copies to the creditors' counsel.

The matter was listed for September 18.