NCLT rules to initiate insolvency proceedings against National Textiles Corp
The National Textile Corporation has defaulted on payments of around Rs 14 lakh and the National Company Law Tribunal has ordered the initiation of insolvency proceedings against the state-run organisation.
The NCLT admitted a plea by one of the NTC’s operational creditors which claimed the Rs 14 lakh default, ET Bureau reported. The NCLT’s New Delhi bench has appointed Amit Talwar as an interim resolution professional for the matter. It has also suspended board of the NTC, rejecting its claims that the dispute over the payment is without substance.
The NCLT ruling is significant because it is perhaps the first time that it has ruled to initiate insolvency proceedings against a central government-owned public sector unit, the Press Trust of India reported. The NTC is under the umbrella of the Ministry of Textiles and produces textiles and yarn with a network of 23 mills situated across the country.
Hero Solar Energy Private Limited has claimed a default of Rs 13.84 lakh which it has asserted was owed as per two contracts, from close to six years ago, for installing solar rooftop power projects. The business claims that the money was owed since the completion of the projects in December, 2016 and April, 2017. The NTC argued that it had deducted money from the payment due to lateness and losses but the NCLT ruled that it was not able to do so.
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