Ezeego settles insolvency dispute with Yatra Online

The top court allowed Ejigo to withdraw his petition against the yatra. Azigo had moved the apex court in April against the March 31 order of the National Company Law Appellate Tribunal (NCLAT) which had dismissed the insolvency application against Yatra.

Setting aside an earlier order of the National Company Law Tribunal (NCLT), Justice Rakesh Kumar Jain of the NCLAT, in a March 31 order, said it was in error in allowing Ezigo to bring in a new date of default, without relying on it. There was another date of default present in the pleadings filed at the commencement of the litigation in question.

Earlier, in March, the National Company Law Tribunal (NCLT) rejected Yatra Online’s application against its operational creditor Ezeego One Travel’s attempt to initiate insolvency resolution. Aggrieved by the order, Yatra then approached the appellate court. In its petition filed before the NCLT, Yatra Online, represented by senior advocate Krishnendu Datta, sought dismissal of Ezeego’s application. Dutta argued that the application was not maintainable being barred by Section 10A of the IBC.

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

He had informed the court that the operational creditor had filed an insolvency application alleging that an amount 3.15 crore is due and payable by Yatra and the date of default has been mentioned in the application as 30 October 2020.

Datta had argued that the date of default stated in the insolvency application was within the barred period under 10A for initiation of insolvency, hence the application was not maintainable. Further, he also submitted that once the operational creditor himself has disclosed the date which falls during the suspension period, the bar under section 10A would necessarily apply.

In response to the objection, Nausher Kohli, representing Ezeego, had submitted that it is for the NCLT to determine the exact date of default rather than going by the pleadings filed by the parties.

Kohli had drawn the bench’s attention to a statement of accounts sent by Yatra in which the loan was accepted 1.59 crore through an email dated 15th November 2021 and said that it shows that the balance is due from 1st April 2019 (which was before 10A period). After hearing the parties, the bench dismissed the travel petition.