NCLT Bengaluru Admits CIRP Against VOI Jeans Retail India Over ₹1.11 Crore Operational Debt Default

The National Company Law Tribunal (NCLT) at Bengaluru has admitted a petition filed by Raymond UCO Denim Pvt Ltd seeking initiation of the corporate insolvency resolution process (CIRP) against VOI Jeans Retail India Pvt. Ltd. for an operational debt of Rs 1.1 crore.

A coram of Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada passed the order.

Raymond UCO Denim, the operational creditor engaged in the business of manufacturing and supplying denim fabrics, approached the Tribunal alleging that VOI Jeans Retail had defaulted in payment of Rs 1,11,75,455 towards invoices raised for supply of fabrics between December 31, 2023 and February 25, 2024.

According to the operational creditor, despite repeated reminder emails, the dues remained unpaid.

VOI Jeans opposed the petition, contending that it was not liable to pay any amount to Raymond and that the insolvency proceedings were being used as a means of money recovery. It also argued that the claim was disputed and therefore the petition was not maintainable.

The tribunal observed that VOI Jeans had made a part payment of Rs 15 lakh, which amounted to acknowledgment of the operational debt. It also noted that the petition had been filed within the limitation period and that Raymond had placed on record the Record of Default issued by the National e-Governance Services Ltd (NeSL) in Form D.

“The said Form D further corroborates the date of default as mentioned in Form 5 of the Petition. Accordingly, the existence of operational debt as well as the occurrence of default stand duly established. Further, the default amount claimed exceeds the statutory threshold of ₹1,00,00,000/- as prescribed under the Code, and therefore the essential ingredients of provisions invoked in the petition are satisfied,” the Bench held.

The tribunal further observed that no material had been placed on record to demonstrate the existence of a genuine pre-existing dispute, and referred to the Supreme Court's ruling in Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd.

Accordingly, the tribunal admitted the petition and initiated CIRP against the corporate debtor. The bench also declared a moratorium under Section 14 of the IBC and appointed Ranjana Singh as the Interim Resolution Professional.

For Petitioner: Advocate Janhvi Pandey

For Respondent: Advocate Akshay J Simha