The National Company Law Tribunal (NCLT) at Bengaluru on Thursday once again deferred its order in a petition seeking initiation of insolvency proceedings against hyperlocal delivery platform Dunzo..This is the third time the tribunal has postponed pronouncing the order.A coram of Judicial Member Sunil Kumar Aggarwal and Technical Member Radha Krishna Sreepada cited time constraints, stating:“We have been sitting till 5:30 PM, we have not been able to finalise the order. Apologies, we have not been able to pronounce the order but have been listing it.”.The plea filed by invoice discounters of a Reliance Retail-backed company has sought admission of Dunzo into the Corporate Insolvency Resolution Process (CIRP). The matter was first listed for pronouncement on April 4, but the NCLT had then also said it had not been able to finalise the order. It was subsequently relisted for April 28 (Monday).However, on April 28, the Tribunal stated that it required three more days to complete the order. On May 1, the matter was again listed, but the coram reiterated that the delay was due to time constraints.During the hearing, lawyers appearing in the matter asked whether the Tribunal required any further clarification or assistance. It responded that the delay was purely due to their inability to finalise the order.The matter is now listed for pronouncement on May 27..The present plea was filed in 2024. The Insolvency and Bankruptcy Code (IBC) stipulates that the Adjudicating Authority (NCLT) must decide on the admission or rejection of an insolvency application within 14 days of its receipt. This timeline is provided under Section 7(4) for financial creditors, Section 9(5) for operational creditors and Section 10(4) for corporate debtor-initiated applications.However, in Surendra Trading Company v. Juggilal Kamalpat Jute Mills Co. Ltd. (2017), the Supreme Court clarified that this 14-day period is directory and not mandatory, meaning the NCLT should aim to adhere to the timeline but cannot be compelled to strictly comply with it..Dunzo has been facing multiple insolvency petitions filed by its creditors due to alleged non-payment of dues. Below are the various parties that have initiated action against it:Invoice discounters of Dunzo Digital: This creditor filed an application claiming that Dunzo had only made 50% of the required payments. The exact amount owed was not disclosed. Velvin Packaging Solutions: A manufacturer of sustainable packaging solutions, Velvin Packaging filed an insolvency plea against Dunzo in November 2023. The NCLT had issued notices to Dunzo over this petition. Betterplace Safety Solutions: This operational creditor filed an insolvency application against Dunzo in February 2024 alleging unpaid dues of ₹4 crore. The dues were reportedly for services such as background verification, recruitment of delivery staff, asset management and merchandise provisions..The NCLT has been critical of Dunzo's delays in responding to these insolvency petitions. In September 2024, the Tribunal noted that Dunzo had not filed its reply to the petitions even after seeking time to do so, leading to the forfeiture of its right to reply.Dunzo's counsel had requested additional time citing ongoing settlement talks, but the Tribunal emphasised that any settlement should be initiated by the other side and required a joint affidavit within two days..Dunzo has been experiencing a liquidity crisis, leading to operational challenges such as delayed salaries, vendor payments and workforce reductions. In the financial year 2023, the company reported a loss of ₹1,801.8 crore, a significant increase from the previous fiscal year. The company has also received legal notices from various vendors, including Google India, Facebook India Online Services Private Limited, Cupshup, Koo and Glance, collectively owed approximately ₹11.4 crore.
