National Company Law Appellate Tribunal Rejects Pepsico’s Plea Urging Release Of Its Machinery From Oceanic Tropical

The National Company Law Appellate Tribunal (NCLAT) has rejected a petition filed by Pepsico India Holdings seeking release of its machinery from the premises of Oceanic Tropical Fruits, which is under insolvency process.

Earlier, Pepsico India had moved the NCLAT against an order passed on May 28, 2019, by the Chennai bench of National Company Law Tribunal (NCLT) which had denied permission to PepsiCo to take back its machinery at the premises of Oceanic Tropical Fruits.

The NCLAT stated that Pepsico cannot derive advantage of its own agreement with Oceanic Tropical Fruits about the Insolvency & Bankruptcy Code (IBC), which has provision of termination in case of bankruptcy or liquidation or similar situation to get the assets back.

The NCLAT also held that there were claims and counter claims by Oceanic Tropical Fruits and PepsiCo over the money to be paid to each other.

The NCLAT stated that a liquidator has to ensure that the corporate debtor (Oceanic Tropical) remains a going concern and steps required to be taken to revive as well as restructure the company during the process.

The resolution professional informed the NCLAT that after initiation of the insolvency, it was not open for PepsiCo to terminate the agreement because IBC mandates him to make every attempt to protect and preserve the value of the corporate debtor and manage its operations as a going concern.

Oceanic Tropical Fruits is facing insolvency proceedings after the NCLT allowed the plea of leading private sector lender ICICI Bank claiming a default of around Rs 100 crore.