The National Company Law Tribunal (NCLT) in New Delhi has instructed Bira and its creditors to engage in mediation to potentially resolve the ongoing insolvency proceedings against the company. This decision was rendered by a special bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Ravindra Chaturvedi on September 15. The bench was addressing multiple proceedings against B9 Beverages Limited, which includes a Section 7 insolvency application filed by Unity Small Finance Bank Limited.
Mediation Order and Tribunal’s Remarks
The Tribunal emphasized that if the mediation does not result in a settlement, it would not entertain further concessions. “It is made clear that if no settlement is arrived between the parties in the meeting directed to be scheduled, no further indulgence would be shown in the matter,” the Tribunal stated. The decision to mediate was influenced by the Tribunal’s awareness of financiers’ willingness to inject capital into Bira to rejuvenate its operations. The company’s legal counsel indicated that discussions for settlement were underway with the creditors.
Creditors’ Response and Settlement Offers
Despite these settlement discussions, several creditors expressed skepticism. Unity Small Finance Bank presented a letter dated September 10, showing an offer of ₹3 crore against liabilities exceeding ₹19.04 crore, which it argued was neither a serious nor feasible settlement offer. Conversely, Axis Bank confirmed receiving a settlement proposal and was considering it. However, some creditors’ legal representatives suggested that these settlement attempts were merely delaying tactics, raising concerns about potential misappropriation of the company’s assets.
Concerns Over Asset Management
The NCLT noted earlier assertions by Bira that it would settle matters with its creditors, a situation that did not materialize as projected. The Tribunal also critiqued a chart presented regarding changes in the company’s shareholding, stating, “We are unable to appreciate how the chart can be relevant at this stage. The same can be perceived only as an attempt on behalf of the Corporate Debtor to mislead the Tribunal on the issue.”
Mediation Logistics and Asset Protection
The Tribunal mandated that Bira’s legal representatives, the financiers interested in reviving the company, and the promoters convene with creditor representatives at the office of Advocate Eshna Kumar on September 17, who was appointed to mediate the dispute. In response to creditors’ concerns about potential asset siphoning, the Tribunal ordered that no assets be disposed of. Furthermore, the financiers aiming to rehabilitate the company were instructed to bring an inventory of all assets to the mediation meeting, providing copies to the creditors.
Advocate Varsha Banerjee represented Unity Small Finance Bank, while Senior Advocate Prasenjit Keswani, along with Advocates Rajat Malhotra, Aditya Vikram Singh, and Shreya Chandhok, appeared for Bira.
[Read Order]
