Captain GR Gopinath's Deccan Charters won a stay from the National Company Law Appellate Tribunal on the insolvency proceedings initiated against the chartered aircraft services company.
Earlier, the Bengaluru bench of the The National Company Law Tribunal had allowed the initiation of bankruptcy proceedings against the company on the complaint of a creditor, Krone Finstock Private Ltd.
National Company Law Appellate Tribunal is the body that hears appeals against the orders of the National Company Law Tribunal.
National Company Law Tribunal had also appointed an Interim Resolution professional to carry on the proceedings. The resolution professional had issued a public announcement on Monday with regard to the bankruptcy proceedings with a deadline of April 19.
However, in its order, the tribunal directed the interim resolution professional not to take any more actions in this case until next hearing of the matter in the tribunal, April 26.
The tribunal also asked Krone Finstock to reply to the arguments made by Deccan Charters in its appeal filed in the tribunal well before the next date of hearing.
It is alleged that the directors of Deccan Charters approached Krone Finstock Private Limited requesting that they were in immediate requirement of a loan to the tune of Rs 5 crore. The Bench observed that based on the representation and warranties of the corporate debtor, the Financial Creditor (Krone) initially forwarded a sum of Rs 50 lakh in 2018 and ,subsequently, a Loan Agreement was entered between Krone and Deccan Charters. Krone also released another Rs 50 lakh and Rs 4 crore in the same year.
Deccan Charters initially paid a sum of Rs 3,07,800 to Krone which was adjusted against the accrued interest. However, Deccan Charters failed to make payment as per the terms laid out in the agreement. Further, in October, 2020 after a series of discussions, the Bengaluru-based company handed over four cheques for an amount of Rs 1,00,00,000 each, but those cheques were dishonoured on November 3, 2020.
Meanwhile, a Business Transfer Agreement was entered into between the Respondent (Deccan Charters) and GMDAPL (GSEC Monarch Deccan Aviation Private Limited), in 2019, wherein as per clause 1 of the BTA, GMDAPL agreed to undertake 100% of the assets and liabilities of the business undertaking of "Air Deccan" and settle all the liabilities of the respondent which included the liability of repayment of debt i.e. loan disbursed by the Applicant. Accordingly, it was claimed that the repayment of loan is the responsibility of GMDAPL.
Krone had filed the application under Section 7 of IBC seeking initiation of Corporate Insolvency Resolution Process against Deccan Charters over the default of Rs 9,82,24,077 on May 4, 2022.