New Delhi: The National Company Court of Appeals (NCLAT) has rejected drinks applications for PepsiCo India Holdings demanding the release of its Ocean Tropical Fruit Machine in bankruptcy.
The main beverages moved NCLAT against the order dated 28.05.2019, from the Chennai bench of the National Society of Justice (NCLT) denying permission to PepsiCo to return its machinery lying in the ocean's tropical fruits.
NCLAT notes that PepsiCo India Holding cannot take advantage of its own agreement with Ocean Tropical Fruits regarding the Bankruptcy and Bankruptcy Code (IBC), which provides for bankruptcy or winding up or similar status to recover them funds.
The appellate court also held that there were claims and counter claims by Oceanic Tropic Fruits and PepsiCo for the money to be paid to each other.
"From the foregoing fact, it is clear that the claim and counter-claim by the corporate debtor (Oceanic Tropic Fruits) and the applicant – Pepsico India Holdings, until the issue of the surrender of any asset is settled, the plants and machinery of appellant do not appear, "said a three-member bench headed by Justice SJ. Muhopadia.
The appellate tribunal noted that the liquidator should ensure that the corporate debtor (Oceanic Tropic) remains in constant care and steps are needed to revive and restructure the company during the process.
"Even during the liquidation process, the Liquidator should ensure that the company's debtor remains in constant care," NCLAT said.
The professional / liquidator resolution submitted to NFLAT that after initiating bankruptcy, PepsiCo was not open to terminate the contract, as the IBF obliged it to make every effort to protect and preserve the value of the corporate debtor and to manage its business operations.
However, NCLAT also said that if the corporate debtor is not wholly sold together with the employees and has no option but to sell its assets and distribute them among the creditors, it may at that stage request the PepsiCo India Holdings liquidator to return factories and machines "if it belongs to a third party".
Ocean Tropical Fruits faces bankruptcy proceedings after the NCLT granted a plea to a leading private sector lender, IFIFI Bank, demanding non-payment of around Rs.
PepsiCo India signed a 10-year contract with Oceanic Tropic in 2011 for the production, processing and packaging of mango-based beverage.
According to PepsiCo India, under their agreement, each party was entitled to terminate the contract if the other party goes into bankruptcy, liquidation, or in the event that its business or assets are confiscated or seized or a liquidation petition is accepted.
PepsiCo sent a notice of termination on November 28, 2017, after liquidity was activated against oceanic tropical fruits and requested permission to return its machine to the corporate debtor's factory.
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