Mahiyar Rohinton Patel, Pune
Syska LED lights, which is a wholly owned subsidiary of the Pune based SSK group, has had insolvency proceedings started against it by the National Company Law Tribunal (NCLT) over unclaimed dues of Rs. 7.7 crores owed to its operational creditor ‘Sunstar Industries’.
The Mumbai bench of the NCLT has admitted the plea against the company, suspending the board of Syska LED Lights as the rules and provisions illuminated Insolvency & Bankruptcy Code (IBC).
Syska made an appeal in front of the NCLT bench in Mumbai that the default and money owed to Sunstar Industries is actually from an old dispute and does not fall into the period of limitations under which the bankruptcy code has the authority to operate in. The court used a chain of multiple emails traded over a period of time between Syska and Sunstar discussing the money owed to the latter as prima facie evidence against Syska.
There was a previous Corporate Insolvency Regulation Process (CIRP) where another operational creditor of Syska filed an appeal against the monies owed to it. This was quickly resolved as the CIRP was withdrawn by May 2024.
As Syska finds itself once again in the iron grip of the CIRP, it stands guilty of not paying out and defaulting on 25 invoices raised between the March of 2023 and July of the same year. Sunstar industries supplied irons on a period of credit extending to 60 days.
Syska has presented a one time settlement offer (OTSO) to the applicant Sunstar industries. This settlement was summarily rejected by Sunstar as they were not willing to let go of the interest aggregated over time as well as several other penalties and fines.
It must be noted that during the submissions in court by the opposing parties, the lawyer representing Syska made an appeal that Sunstar initiated proceedings against the company under the Micro, Small and Medium Enterprises Act, 2006. The bench comprising Justices Anil Raj Chellan and Kuldip Kumar Kareer rejected this claim saying it is irrelevant to the case at hand and this does not stop the CIRP proceeding against them.