The National Company Law Tribunal (NCLT) on Thursday dismissed a petition seeking corporate insolvency resolution process (CIRP) against Zomato for alleged non-payment of dues..A coram of Judicial Member Ashok Kumar Bharadwaj and Technical Member Reena Sinha Puri dismissed the petition filed by B2B apparel manufacturer Nona Lifestyle seeking restoration of the insolvency plea filed by it last year. "Having heard the petitioner on two different dates, we satisfied ourselves regarding the maintainability of the plea. Since we are satisfied that the petition itself is not maintainable we are not inclined to entertain the IA," the NCLT held. .Nona Lifestyle had entered into a business relationship with Zomato to supply uniforms for its employees and delivery partners, including merchandise for the ICC World Cup 2023. The company had planned a campaign during the World Cup. As per the petition, Zomato placed multiple orders for various apparel items, including rider t-shirts, trousers and World Cup jerseys, throughout 2023. Nona Lifestyle claimed that it fulfilled its obligations by manufacturing and delivering the ordered goods in part. However, the company alleged that Zomato consistently delayed payments and failed to take delivery of substantial portions of the ordered products.According to Nona, Zomato repeatedly delayed payments, returned deliveries citing lack of storage space and even resorted to "threats and warnings" to force Nona Lifestyle to offer discounted rates.Nona Lifestyle also alleged that Zomato refused to accept delivery of remaining World Cup jerseys, claiming the campaign had failed despite the apparel being custom-made and therefore unusable for other purposes.Zomato denied these claims and contended that Nona Lifestyle consistently failed to meet agreed-upon delivery timelines, resulting in penalties being applied as per their contract.According to Zomato, Nona Lifestyle unilaterally changed delivery schedules, leading to the campaign's failure..Zomato claimed it suffered "substantial reputational and goodwill damage" due to these delays. While the insolvency plea came up for hearing in October 2024, it was dismissed for non-prosecution in November 2024. Subsequently, a petition was filed for restoration of the insolvency plea. During the hearing of the restoration petition today, advocate Tanu Singhal, who appeared for Nona Lifestyle, told the NCLT that she could not attend the hearing due to a mix up..Advocate Abhishek Anand, who appeared for Zomato, argued that the petition itself is not maintainable as it was filed without serving a proper notice under Section 8 of the Insolvency and Bankruptcy Code (IBC). .Singhal however claimed that this was a technical ground and a plea could not be dismissed on such hyper technical grounds. .The Bench however noted that "a perusal of the precedents and law revealed that an operational creditor must issue notice in a prescribed manner to the corporate debtor. It is clear that the notice shall be in a prescribed format. In the absence of a notice in a prescribed format."Thus, it ruled that in the absence of a notice in a prescribed manner, the plea is not maintainable. .The NCLT noted that since the CIRP plea is itself not maintainable, they are not inclined to entertain a petition to restore it. Thus, the tribunal dismissed the plea.
