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Ezeego settles insolvency dispute with Yatra Online


Ezeego Tours and Travels has settled its insolvency dispute with Yatra Online, the Supreme Court reported on Tuesday.

The top court allowed Ezeego to withdraw his petition against Yatra. This comes after Ezeego challenged the Supreme Court in April against a March 31 National Company Law Appellate Tribunal (NCLAT) order that rejected an insolvency application against Yatra.

While NCLAT Judge Rakesh Kumar Jain overturned an earlier National Company Law Tribunal (NCLT) order, he had said in the March 31 order that an error had been made in allowing Ezeego to set a new default date in without taking into account that there was another date of default that existed in the pleadings that were filed at the commencement of the lawsuit.

Before that, in March, the National Company Law Tribunal (NCLT) had rejected Yatra Online’s application against its operating creditor Ezeego One Travel’s attempt to initiate an insolvency settlement. Aggrieved by the order, Yatra then went to the appeals court. In its petition submitted to the NCLT, Yatra Online, represented by senior advocate Krishnendu Dutta, had requested that Ezeego’s application be rejected. Dutta argued that the application could not be enforced because it was blocked by Section 10A of the IBC.

Section 10A of the IBC prohibits filing of insolvency filings for defaults that occurred between March 2020 and March 2021, a period exempt due to the Covid-19 pandemic.

He had informed the court that the operating creditor had filed the insolvency application claiming an amount of 3.15 crore is due and payable by Yatra and stated the date of default as October 30, 2020 in the application.

Dutta had argued that since the default date stated in the insolvency filing fell within the statute of limitations under 10A for initiating insolvency, the filing was not enforceable. In addition, he also argued that once the operating creditor itself has declared the date of default that occurs during the suspension period, the bar under Section 10A will inevitably apply.

In response to the objection, Nausher Kohli, representing Ezeego, had said that it is the duty of the NCLT to determine the actual date of default rather than go by the pleadings submitted by the parties.

Kohli had drawn the bank’s attention to a ledger statement from Yatra acknowledging the debt of 1.59 crore via an email dated Nov 15, 2021 and said it showed that the balance has been outstanding since Apr 1, 2019 (which was before the 10A period). After hearing the parties, the court rejected Yatra’s plea.

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Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.