The National Company Law Tribunal (NCLT) has rejected a petition seeking the initiation of corporate insolvency resolution proceedings against Zomato over alleged non-payment of dues.
A bench comprising Judicial Member Ashok Kumar Bharadwaj and Technical Member Reena Sinha Puri dismissed the plea filed by B2B apparel manufacturer Nona Lifestyle, which sought to restore an insolvency petition originally filed last year.
“After hearing the petitioner on two occasions, we are satisfied that the petition itself is not maintainable. Consequently, we are not inclined to entertain the interlocutory application,” the tribunal stated.
Nona Lifestyle had partnered with Zomato to supply uniforms for its employees and delivery personnel, as well as merchandise for the ICC World Cup 2023. According to the petition, Zomato placed multiple orders throughout 2023 for rider apparel, trousers, and jerseys. However, Nona Lifestyle alleged that Zomato delayed payments, returned deliveries citing storage issues, and even pressured the company to offer discounted rates.
Further, the company claimed that Zomato refused to accept the remaining World Cup jerseys, arguing that the campaign had failed, rendering the customized apparel unusable.
Zomato, however, refuted these allegations, contending that Nona Lifestyle had repeatedly missed delivery deadlines, leading to penalties as per their agreement. The company asserted that the delays caused significant reputational and goodwill damage.
The initial insolvency plea was dismissed in November 2024 due to non-prosecution. Nona Lifestyle subsequently filed a petition seeking its restoration. During the hearing on the restoration plea, the tribunal observed that the original petition was not maintainable as it lacked the mandatory notice required under Section 8 of the Insolvency and Bankruptcy Code (IBC).
“The operational creditor must issue notice in the prescribed manner to the corporate debtor,” the tribunal noted, adding that in the absence of such notice, the plea could not be entertained.
Given these findings, the NCLT ruled against restoring the petition and dismissed the plea.
