The National Company Law Appellate Tribunal (NCLAT) on Monday condoned the delay over a plea to initiate an insolvency petition filed against food & beverage major PepsiCo India Holdings by one of its operational creditors and directed to list for hearings before a bench.
The Registrar of the appellate tribunal has condoned the delay of six days in re-filing the Memo of Appeal against the orders of the Chandigarh bench of the National Company Law Tribunal, which had rejected SNJ Synthetics's plea.
Under the Insolvency and Bankruptcy Code (IBC), a person aggrieved by an NCLT order can challenge it before the appellate tribunal NCLAT by filing an appeal within 30 days from the date of receiving the NCLT order.
"Considering the submissions made on behalf of the appellant and for the reasons mentioned in the IA, which are sufficient, the delay of 06 days in re-filing the Memo of Appeal is hereby condoned. As prayed, list the case before the Bench under the heading ‘for admission (fresh case)’," said an order by NCLAT Registrar.
The Chandigarh bench of NCLT on January 5, 2025, dismissed the section 9 plea filed by SNJ Synthetics against PepsiCo India Holdings after observing that in the present case, the principal amount stands paid, therefore the CIRP (corporate insolvency resolution process) cannot be initiated solely on the basis of the claim of interest component.
SNJ Synthetics had claimed a due of Rs 1.96 crore in which principal amount was at Rs 91.63 lakh and had calculated interest at the rate of 24 per cent per annum of Rs 1.05 crore as on February 28, 2021.
During the pendency, the parties settled on February 10, 2023, the amount of Principal outstanding with the Reconciled Amount of Rs 77.73 lakh and then after the petitioner has submitted that its claim now is for the outstanding interest amount of Rs 1.05 crore.
However, this was dismissed by NCLT observing that the principal amount has been paid during the pendency of the Petition, therefore a requirement of Section 9(5)(i)(b) of IBC is not complied with.
Section 9(5)(i)(b) of the Code provides that NCLT shall admit the application if there is no payment of the unpaid operational debt and reject the application if there has been payment of the unpaid operational debt.
NCLT also said the reconciled amount was Rs 77.73 lakh, which is only 84.83 per cent of Rs 91.63 lakh, which is the principal amount claimed in the Petition and if the same ratio is applied presuming the proportional reduction of each of the principal amount due from PepsiCo, the interest amount works out to Rs 89.21 lakh, which would be below the threshold amount of Rs 1 crore and thus the petition may not be maintainable for the interest amount.
Moreover, the supply agreement dated October 9, 2018, did not have the signature of both the parties, said NCLT.
The memo of appeal was filed by SNJ Synthetics on January 28, however, NCLAT's registrar office, after scrutiny of the Memo of Appeal on February 7, 2025, intimated the defects. SNJ Synthetics re-filed the appeal on February 20, 2025.
SNJ Synthetics is in the business of PET Preform manufacturing. It had entered into a supply agreement with PepsiCo, wherein it was to manufacture products to be supplied to the beverages major for the production of PET bottles for bottled carbonated soft drinks, and non-carbonated beverages.
PepsiCo had transferred the business to Varun Beverages under a Business Transfer Agreement on February 18, 2019, and the dispute is before that period.
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