New Delhi: The National Company Law Tribunal (NCLT) has dismissed a petition seeking to initiate insolvency proceedings against food delivery giant Zomato for alleged non-payment of dues. The plea, filed by B2B apparel manufacturer Nona Lifestyle, was rejected on grounds of being โnot maintainable.โ
Background of the Dispute
Nona Lifestyle had supplied uniforms and merchandise, including ICC World Cup 2023 jerseys, for Zomatoโs employees and delivery partners. The company claimed that while it fulfilled part of the order, Zomato delayed payments, refused to accept deliveries, and even pressured Nona for discounted rates.
Nona further alleged that Zomato backed out of accepting World Cup jerseys, leaving the custom-made stock unusable. However, Zomato countered these claims, stating that Nona repeatedly missed delivery deadlines, causing reputational harm and campaign failures.
NCLTโs Decision
The tribunal, comprising Judicial Member Ashok Kumar Bharadwaj and Technical Member Reena Sinha Puri, noted that Nona Lifestyle failed to issue a mandatory legal notice under Section 8 of the Insolvency and Bankruptcy Code (IBC) before filing the plea. Since the petition did not meet procedural requirements, the NCLT refused to restore the case, which had earlier been dismissed for non-prosecution.
Zomatoโs legal team argued that the petition was invalid due to the lack of proper notice, while Nonaโs counsel called the objection a โhyper-technicalโ ground. However, the tribunal upheld the legal necessity of following due process, leading to the dismissal of the plea.
This ruling reinforces the importance of adhering to procedural formalities under the IBC when initiating insolvency proceedings.
