NCLAT Rules In Favour of HUL In Insolvency Allegations

NCLAT Rules In Favour of HUL In Insolvency Allegations

SUMMARY

NCLAT has reportedly ruled in favour of FMCG major Hindustan Unilever Limited (HUL) while hearing an alleged insolvency plea filed by an operational creditor

The petition, filed by Lalithambica Enterprises, accused HUL of breaching the Insolvency & Bankruptcy Code (IBC)

The judgement came on Monday (27 January)

The National Company Law Appellate Tribunal (NCLAT) has reportedly ruled in favour of FMCG major Hindustan Unilever Limited (HUL) while hearing an alleged insolvency plea filed by an operational creditor.

According to an Economic Times report, petitioner Lalithambica Enterprises accused HUL of breaching the Insolvency & Bankruptcy Code (IBC).

On Monday (27 January), the appellate tribunal upheld an order, liberating HUL from the allegations.

Both the companies had running accounts from 2008 to 2018.

Lakshmi Narayana, the promoter of Lalithambica Enterprises, filed the plea on the ground of Corporate Insolvency Resolution Process (CIRP). As per IBC, the minimum limit of default is INR 1 Cr for initiation of this process.

The creditor claimed that HUL owes 24% interest on the principal amount of INR 59 Lakh to the enterprise. With the due interest, the amount will exceed INR 1 Cr.

However, in 2024, the Mumbai bench of the National Company Law Tribunal (NCLT) discovered that the sum of the invoices was less than the threshold limit. The observation was larer challenged before the NCLAT.

The development comes at a time when HUL recently signed an agreement to acquire D2C brand Minimalist in an INR 2,670-Cr deal. With this infusion, the FMCG major will acquire 90.5% stake in Minimalist’s parent company. Later, it will invest INR 45 Cr over the course of two years to acquire the remaining 9.5% stake.

Back in 2022, HUL also acquired two D2C nutrition brands – OZiva and Wellbeing Nutrition – by infusing INR 334.28 Cr in tranches.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.

You have reached your limit of free stories
Become A Startup Insider With Inc42 Plus

Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in india's startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
UNLOCK 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
UNLOCK 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

NCLAT Rules In Favour of HUL In Insolvency Allegations-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

NCLAT Rules In Favour of HUL In Insolvency Allegations-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

NCLAT Rules In Favour of HUL In Insolvency Allegations-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

NCLAT Rules In Favour of HUL In Insolvency Allegations-Inc42 Media
NCLAT Rules In Favour of HUL In Insolvency Allegations-Inc42 Media
You’re in Good company