The National Court of Corporate Law has ordered insolvency proceedings against Aviva Life Insurance in a case brought by the Apeejay Trust.
A two-member bank of NCLT Delhi, composed of Justice RD Khare and Sumita Purkayastha, has admitted the suit against Aviva Life Insurance and has also appointed a provisional settlement professional to handle the day-to-day affairs of the company.
Apeejay Trust, which had rented its Mumbai (Vashi) -based premise to Aviva Life Insurance, claimed a default of Rs 27.67 lakh as an operating lender for not receiving service tax and license fee payments for the premise.
Under the trust, Aviva – a joint venture between Dabur Invest Corp (Dabur group) and Aviva International Holding Ltd – paid no license fee, parking fee, maintenance / service charge and service charge. He made his last payment in this regard on October 5, 2017, and from then on the debt was past due.
"Considering the circumstances in which this court is inclined to admit this petition and initiate the corporate debtor's CIRP. Consequently, this petition is admitted," said the National Court of Business Law (NCLT).
He also declared a moratorium under section 14 of the Insolvency and Bankruptcy Code (IBC), protecting the company from its creditors during the process.
In the course of the proceedings, Aviva questioned the maintenance of the Apeejay Trust's plea because it is an insurance company and therefore a provider of financial services, IBC cannot be applied against it.
According to the IBC, there is an absolute order to initiate any lawsuit against insurance companies.
This was rejected by the NCLT saying "the operating lender has no claim regarding the insurance contract. The claim relates to the pending license fee and service tax amount."
"Therefore, the corporate debtor cannot use the provision of … IBC as a general cover to claim exclusion from IBC procedures because it is a financial service provider," NCLT said in its Nov. 4 request. 2019.
Meanwhile, Aviva Life Insurance said in a statement: "The issue at issue is a business dispute with a supplier and Aviva reserves rights and remedies in court. Our customer policies are fully secure and we remain committed to expanding our business and customers at India ". Get access to India's fastest growing financial subscription service, Moneycontrol Pro, for just $ 599 in the first year. Use the code "GETPRO". Moneycontrol Pro gives you all the information you need for wealth creation, including actionable investment ideas, independent research and insights, and analysis. For more information, see the Moneycontrol website or mobile app.