NCLT Ahmedabad Dismisses Insolvency Plea Against Manpasand Beverages After Creditor Ceased To Exist Following Merger

The Ahmedabad Bench of the National Company Law Tribunal has recently dismissed an insolvency petition filed by a manufacturer of PET preforms against Mango Sip manufacturer Manpasand Beverages Limited.

The Tribunal held that the petition was defective and not maintainable because the petitioner had ceased to exist as a separate legal entity following its amalgamation with another company. However, the proceedings continued in its name without a timely substitution application.

The bench comprised Judicial Member Chitra Hankare and Technical Member Dr. Velamur G. Venkata Chalapathy.

Annapurna Pet Private Limited, the operational creditor, had supplied PET preforms to Manpasand Beverages, a manufacturer and dealer of fruit juice and cold drinks, since 2014. Annapurna alleged a default of about ₹4.40 crore. It relied on unpaid invoices, ledger accounts, tax filings, and 32 dishonoured post-dated cheques.

A demand notice was issued on May 30, 2023. Manpasand subsequently made part-payments in January 2024. Annapurna submitted that the petition was within the limitation period after excluding the period during which Manpasand was undergoing the corporate insolvency resolution process.

Annapurna later stated that it had amalgamated with Waterproof Corporation Private Limited (WACO) under an order passed by the National Company Law Tribunal, Mumbai, on August 27, 2024.

It submitted that WACO had become its successor-in-interest and succeeded to all its rights and claims, including the operational debt. WACO therefore sought substitution in place of Annapurna. It contended that this was only a consequential amendment and did not alter the alleged debt or default.

Manpasand contested the petition. It alleged inconsistencies in the date and amount of default. It also questioned the use of the prescribed format for the demand notice and the authority of the person who issued it.

The respondent further contended that substantial payments had been made. It alleged that certain payments had not been properly reflected while calculating the outstanding dues. It also pointed to disputes pending between the parties before the Gujarat High Court.

The Tribunal noted that Annapurna was already undergoing merger proceedings when the petition was filed. By the time the petition was re-filed after defects were removed, the amalgamation order had been passed.

However, the petition continued in Annapurna's name. The Tribunal also noted that the substitution application was filed only after the respondent raised objections during final submissions.

The bench observed, “Still the petitioner chooses to file application in its own name which was no more in existence in the eyes of law.”

Holding that a non-existing entity could not maintain the application, the Tribunal rejected and disposed of the petition. It also held that the persons who signed the application and affidavit had no authority to do so after Annapurna's dissolution.