India's National Company Law Appellate Tribunal (NCLAT) has suspended insolvency proceedings against Deccan Charters (Bengaluru International) until its next hearing on April 26, according to multiple local media reports.
The tribunal directed the applicant, financial creditor Krone Finstock, to reply within four days to arguments presented by Deccan Charters in its appeal filed with the NCLAT, reported The New Indian Express newspaper.
This comes after the Bengaluru bench of the National Company Law Tribunal (NCLT) ordered the initiation of a Corporate Insolvency Resolution Process (CIRP) based on a petition by Krone Finstock, alleging a default of about INR100 million rupees (USD1.1 million).
According to court papers before the NCLT viewed by ch-aviation, Deccan Charters took a loan of INR50 million (USD598,000) from Krone Finstock in 2018 to form a joint venture with GSEC Monarch & Deccan Aviation Pvt Ltd, with the understanding that the liability for repaying the loan would be transferred to the latter party. Deccan Charters even filed a case against its former JV partner before the NCLT, but this was dismissed on January 12, 2024.
According to The New Indian Express, Krone Finstock lent Deccan Charters another INR62.1 million (USD742,800) in 2018.
Deccan Charters repaid some amount, which was adjusted into the accrued interest, but subsequently failed to repay the rest, upon which Krone Finstock filed a complaint with the NCLT, which on April 5, 2024, ordered the initiation of insolvency proceedings, reported the Economic Times.
Established in 1997, Deccan Charters offers a range of aviation services, including charter flights, helicopter services, aircraft management, and maintenance, repair, and overhaul (MRO) services.
