In re Imperial Banquets & Dining Private Limited (NCLT Delhi)
National Company Law Tribunal (NCLT), Delhi Bench, has dismissed an application filed by M/s Imperial Banquets & Dining Private Limited seeking to initiate a Corporate Insolvency Resolution Process (CIRP) against itself. The NCLT concluded that the company’s true intention was to evade its substantial financial obligations to the Delhi Tourism and Transportation Development Corporation Limited (DTTDC), rather than genuinely seeking a resolution under the Insolvency and Bankruptcy Code (IBC), 2016.
Imperial Banquets & Dining Private Limited, incorporated in 2015 as a Special Purpose Vehicle (SPV), was established with the sole aim of operating, managing, and transferring (OMT) a fine dining restaurant with banqueting facilities at Delhi Haat Janakpuri. The company had entered into a Concession Agreement with DTTDC on December 11, 2015, for a period of 10 years.
Impact of COVID-19 and Subsequent Disputes:
The company asserted that it was successfully running a profitable business until the onset of the nationwide COVID-19 lockdown in early 2020. The pandemic severely impacted its operations, forcing a shutdown. Even after the lifting of lockdown measures, the business continued to suffer. Despite this, DTTDC allegedly continued to levy Annual Concession Fees and other charges.
Facing financial distress, Imperial Banquets & Dining Private Limited, on February 21, 2022, formally requested DTTDC for a waiver of annual concession charges, property tax, and GST for the period from September 1, 2021, to March 31, 2022. The company claimed that DTTDC officials verbally acknowledged this request, but no formal action was taken.
Subsequently, the company proposed a repayment schedule and made an initial payment of Rs. 20,00,000/- to DTTDC on April 29, 2023. However, just days later, on May 4, 2023, DTTDC issued a demand letter for Rs. 5,63,35,760/- from the company.
