NCLT orders insolvency proceedings against Aviva Life Insurance; Apeejay Trust files case, claims Rs 27.67 lakh default payment

Aviva- JV between Dabur Invest Corp (Dabur group) and Aviva International Holding Ltd--has not paid license fee, car parking, maintenance/service charge and service tax. It had made its last payment in this regard on 5 October 2017 and from then the debt was lying due

Press Trust of India November 12, 2019 10:14:21 IST
NCLT orders insolvency proceedings against Aviva Life Insurance; Apeejay Trust files case, claims Rs 27.67 lakh default payment
  • Apeejay Trust, which had leased its Mumbai-based (Vashi) premise to Aviva Life Insurance, claimed a default of Rs 27.67 lakh as an operational creditor for not receiving payments towards service tax and license fee for the premise

  • Aviva- JV between Dabur Invest Corp (Dabur group) and Aviva International Holding Ltd--has not paid license fee, car parking, maintenance/service charge and service tax. It had made its last payment in this regard on 5 October 2017 and from then the debt was lying due

  • Aviva Life Insurance in a statement said: "The issue at hand is a commercial dispute with a vendor and Aviva reserves it rights & remedies in the court of law

New Delhi: The National Company Law Tribunal has ordered to initiate insolvency proceedings against Aviva Life Insurance in a case filed by Apeejay Trust.

A two-member bench of NCLT Delhi comprising Justice R D Khare and Sumita Purkayastha allowed the plea against Aviva Life Insurance and has also appointed an interim resolution professional to run day-to-day affairs of the company.

Apeejay Trust, which had leased its Mumbai-based (Vashi) premise to Aviva Life Insurance, claimed a default of Rs 27.67 lakh as an operational creditor for not receiving payments towards service tax and license fee for the premise.

According to the trust, Aviva—a JV between Dabur Invest Corp (Dabur group) and Aviva International Holding Ltd—has not paid license fee, car parking, maintenance/service charge and service tax. It had made its last payment in this regard on 5 October 2017 and from then the debt was lying due.

"Considering the circumstances this tribunal is inclined to admit this petition and initiate CIRP of the corporate debtor. Accordingly this petition is admitted," The National Company Law Tribunal (NCLT) said.

NCLT orders insolvency proceedings against Aviva Life Insurance Apeejay Trust files case claims Rs 2767 lakh default payment

Representational image.

It has also declared a moratorium under section 14 of the Insolvency and Bankruptcy Code, protecting the company from its lenders during the process.

During the proceedings, Aviva had questioned the maintainability of Appeejay Trust's plea on the ground that it is an insurance company and thus being a financial service provider, IBC can not be applied against it.

According to it, there is an absolute bar under IBC to initiate any proceedings against insurance companies.

This was rejected by the NCLT saying "the operational creditor does not have any claim in respect of a contract of insurance. The claim is with respect to the outstanding license fee and the service tax amount".

"Hence, the corporate debtor can not use the provision of ... IBC as a blanket cover to claim exclusion from IBC proceedings on the ground that it is an financial service provider," said the NCLT in its order dated November 4, 2019.

Meanwhile, Aviva Life Insurance in a statement said: "The issue at hand is a commercial dispute with a vendor and Aviva reserves it rights & remedies in the court of law. Our customers policies are fully secure and we remain committed to growing our business and customers in India".

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Insolvency and Bankruptcy Code: An efficient mechanism for tackling NPAs but resolution professionals face challenges
Business

Insolvency and Bankruptcy Code: An efficient mechanism for tackling NPAs but resolution professionals face challenges

Intention of bringing in new insolvency law was essentially to clean up the banking mess and thereby providing a boost to the economy

Lenders to move Supreme Court against NCLAT order on higher payout to Essar Steel's operational creditors: SBI chief
Business

Lenders to move Supreme Court against NCLAT order on higher payout to Essar Steel's operational creditors: SBI chief

Giving secured creditors same treatment as operational creditors is a huge disincentive for secured creditors, said Rajnish Kumar

NCLAT asks ED to release Bhushan Power and Steel's assets; puts on hold Rs 19,700-cr sale to JSW Steel
Business

NCLAT asks ED to release Bhushan Power and Steel's assets; puts on hold Rs 19,700-cr sale to JSW Steel

The ED had seized a portion of Bhushan Power and Steel's (BPSL) assets in the money laundering case against its former promoters