Clarion Health Foods appeals against order admitting Goli Vada Pav to insolvency process

Appeal filed against Goli Vada Pav's insolvency

The National Company Law Appellate Tribunal (NCLAT) on January 12 issued notice in Clarion Health Foods LLP's application for condoning the delay in challenging an order admitting Mumbai-based fast-food restaurant chain Goli Vada Pav Private Limited to insolvency resolution process.

Clarion holds a 75 percent stake in Goli Vada Pav. The case will likely come up for hearing in the last week of January.

The Mumbai bench of NCLT on September 5 passed an order admitting Goli Vada Pav to insolvency resolution process. The order was passed on a plea of Vista Processed Foods Pvt Ltd, which alleged that Goli Vada Pav failed to pay Rs 3.56 crore. Vista told the tribunal that in 2020, 2021 and 2022, the fast-food chain provided signed balance confirmations, admitting and acknowledging the existence of debt.

According to Vista, Goli Vada Pav did not repay the debt despite repeated reminders. Goli Vada Pav said the plea was barred by limitation as some of the invoices were more than three years old. As per the Insolvency and Bankruptcy Code, 2016, a plea can be filed up to three years after default.

Seeking the dismissal of the plea, the restaurant chain contended that neither the purchase order nor the invoices stipulated that interest could be charged on delayed payment but Vista was insisting on it.

NCLT order

Goli Vada Pav's only defence was that the plea was barred by limitation and the restaurant chain had not denied or refuted any other facts., NCLT said.

If the facts pleaded in the petition are not specifically denied in the reply, the same are deemed to have been admitted,  therefore, the other contentions raised by Goli Vada Pav during arguments were liable to be rejected, it said.

"We are of the considered view that Vista Processes Foods has been able to establish the existence of the debt due on account of supply of goods to Goli Vada Pav in respect of which default has been committed by the latter," NCLT said.

The bankruptcy court admitted the plea and appointed Vinod Radhakrishnanan Nair as the insolvency resolution professional. The order also directed Vista to deposit Rs 3 lakh as initial costs.