New Delhi, April 6 The National Company Law Appellate Tribunal has ordered the completion of the insolvency proceedings for Future Lifestyle Fashion within three months.
While rejecting an appeal filed by an operational creditor, a two-member bench has asked the Resolution Professional and the National Company Law Tribunal (NCLT) to complete the proceedings, preferably within three months.
The appellate insolvency tribunal observed that the Resolution Professional still has possession of the leased property and cannot be released, hence dismissed it.
"However, we request the Resolution Professional/the NCLT to conclude the proceedings as expeditiously as possible, preferably within three months from today," said a two-member National Company Law Appellate Tribunal (NCLAT) bench, comprising Justice Yogesh Khanna and Ajai Das Mehrotra.
Insolvency proceedings against Future Lifestyle Fashion Ltd (FLFL) were initiated by the Mumbai bench of NCLT on May 4, 2023, over a petition filed by Bank of India.
The Insolvency and Bankruptcy Code (IBC) mandates completing CIRP within 330 days, which includes the time taken during litigations. This time limit has already been exhausted.
During the proceedings, the NCLAT was informed that the property, for which an appeal has been filed, is the only premises where the operation of FLFL continues under its brand CENTRAL.
"Furthermore, more than 80 per cent of the Corporate Debtor's (FLFL) business comes from the subject Property," the appellate tribunal noted in its order.
The 18-page order further noted that the RP disclosed at the 30th CoC meeting that the Central Store recorded total sales of Rs 1,211.74 lakh during the CIRP, whereas all the other stores combined recorded total sales of Rs 713.71 lakh during the CIRP.
"The possession of the Property by the Corporate Debtor is critical to maintain the Corporate Debtor as a going concern and to resolve the Corporate Debtor in the CIRP," it added.
More so, when a total of 16 stores have been vacated during CIRP, and the Resolution Professional team is currently in the process of vacating seven more stores, and only two stores as of date are operational, i.e., Central and Surat Stores.
Before the crisis, which led to the collapse of the retail empire of Kishore Biyani-led Future Group, FLFL was operating in-house retail chains Central and Brand Factory, exclusive brand outlets (EBOs) and other multi-brand outlets (MBOs) of nearly a dozen apparel labels, including Lee Copper, Champion, Indigo Nation, Giovani, John Miller, Scullers, Converse and Urbana in its portfolio.