NCLT defers insolvency order on Dunzo for third time
Dunzo’s insolvency plea remains undecided as the NCLT cites time constraints for a third deferral. The order is now expected on May 27, even as the company faces multiple creditor claims and liquidity issues.
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The National Law Company Tribunal (NCLT) in Bengaluru on Thursday once again deferred its order on a petition seeking the initiation of insolvency proceedings against hyperlocal delivery platform Dunzo, as per reports by Bar & Bench.
This marks the third postponement by the Tribunal, despite the urgency outlined under India's Insolvency and Bankruptcy Code (IBC).
The insolvency plea, filed by invoice discounters of the Reliance Retail-backed startup, was first scheduled for pronouncement on April 4, then pushed to April 28, and again to May 1. On each occasion, the Tribunal cited the inability to finalise the written order. It has now scheduled the pronouncement for May 27.
The plea was originally filed in 2024, seeking the admission of Dunzo into the Corporate Insolvency Resolution Process (CIRP). Under Section 7(4), 9(5), and 10(4) of the IBC, the NCLT is expected to admit or reject such applications within 14 days.
However, in Surendra Trading Company v. Juggilal Kamalpat Jute Mills Co. Ltd. (2017), the Supreme Court clarified that this timeline is directory, not mandatory.
Dunzo has been battling a mounting financial crisis, with several creditors initiating insolvency proceedings. Among them are:
-Invoice discounters who claim only partial payments were made by Dunzo.
- Velvin Packaging Solutions, which filed a petition in November 2023 over undisclosed dues.
- Betterplace Safety Solutions, an operational creditor claiming unpaid dues worth Rs 4 crore for staffing and logistics-related services.
In September 2024, the NCLT pulled up Dunzo for failing to file replies to petitions despite being granted time.
The Tribunal even forfeited the company's right to respond after repeated non-compliance. Dunzo's counsel cited ongoing settlement negotiations, but the bench insisted any such efforts must come from the petitioners and be backed by a joint affidavit.
Dunzo's financial stress is evident. For FY23, it reported a loss of Rs 1,801.8 crroe, a steep rise from the previous fiscal. It is also facing legal claims from multiple vendors, including Google India, Meta (Facebook India), Koo, Glance, and Cupshup, with dues totalling nearly Rs 11.4 crore.
