Dunzo Dodges a Bullet: NCLT Dismisses Insolvency Plea, Giving Startup a Fresh Lease on Life

In a notable moment for quick commerce firm Dunzo, the National Company Law Tribunal (NCLT) in Bengaluru dismissed an insolvency application made by invoice discounters against company.

 

The proceedings were comprised of Judicial Member Sunil Kumar Aggarwal and Technical Member Radha Krishna Sreepada. The tribunal ruled that the application was not maintainable.

 

The ruling after three previous delays is a temporary relief for Dunzo since it is facing multiple insolvency applications from different creditors who have accused Dunzo of not paying their dues. The proceedings by invoice discounters indicated Dunzo had paid 50% of the dues, however, they failed to specify how much.

 

However, amidst other applications for insolvency, Dunzo has continued to navigate through the continuing liquidity crisis and remains under financial stress. Other creditors awaiting their applications for insolvency include Velvin Packaging Solutions and Betterplace Safety Solutions. Dunzo reported a loss of ₹1,801.8 crore of the financial year 2023 and is under legal notices for payments of dues from major vendors such as Google India, Facebook India, Cupshup, Koo and Glance, with total dues equal to approximately ₹11.4crore.

 

So, amidst the continuing liquidity crisis and operational issues, today’s NCLT decision is a slight relief as Dunzo continues on its path to recover financially.

 

Source: Bar & Bench