NCLAT Upholds NCLT Order; Directs Insolvency Proceedings Against Sahara Group’s Q Shop Unique Products Range Ltd
[ By Bobby Anthony ]The National Company Law Appellate Tribunal (NCLAT) has upheld a National Company Law Tribunal (NCLT) order and directed initiation of insolvency proceedings against a Sahara group subsidiary called Sahara Q Shop Unique Products Range Ltd.Earlier, on December 15, 2017, the NCLT had admitted a plea to initiate insolvency proceedings against the company, filed by one of...
The National Company Law Appellate Tribunal (NCLAT) has upheld a National Company Law Tribunal (NCLT) order and directed initiation of insolvency proceedings against a Sahara group subsidiary called Sahara Q Shop Unique Products Range Ltd.
Earlier, on December 15, 2017, the NCLT had admitted a plea to initiate insolvency proceedings against the company, filed by one of its operational creditors.
However, the NCLT order was challenged before the appellate tribunal by a shareholder of Sahara Q Shop.
The shareholder contended that there was no payment default by his company, since it could not pay its creditors only because the Supreme Court had prohibited the Sahara Group from paying any amount to anybody during the on-going contempt proceedings.
However, the NCLAT rejected his plea and observed that there was no such specific direction in the Supreme Court order.
However, the plea was rejected by the NCLAT observing that there was no such specific directions in the Supreme Court order to Sahara Q Shop to stop payment in the matter of two Sahara group companies — 'Sahara India Real Estate Corporation Ltd' and 'Sahara Housing Investment Corporation Ltd'.
The NCLAT stated that the Supreme Court order contained nothing that stated urged Sahara Q Shop to stop payment in the matter of two Sahara group companies, namely, Sahara India Real Estate Corporation Ltd and Sahara Housing Investment Corporation Ltd.
THE NCLAT also observed that another Sahara Group company, namely Sahara Hospitality had settled a claim before the NCLT in another matter by paying Rs 20 crore.
Incidentally, the insolvency plea was filed by S Gurumoorthy, an operational creditor under Section 9 of the Insolvency and Bankruptcy Code (IBC) with the NCLT on December 15, 2018.
In December 21, 2018, the Serious Fraud Investigation Office (SFIO) began probing Sahara Group firm Sahara Q Shop Unique Products Range Ltd after receiving 744 complaints against it.