The NCLT Bengaluru dismissed an insolvency plea against Dunzo filed by its invoice discounters. The Tribunal said the case was not valid, even as Dunzo faces multiple financial troubles.
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KARNATAKA: The National Company Law Tribunal (NCLT) in Bengaluru has rejected an insolvency case filed against quick delivery company Dunzo. This case was brought by some companies who help businesses get early payments for their invoices, known as invoice discounters.
The bench was led by Judicial Member Sunil Kumar Aggarwal and Technical Member Radha Krishna Sreepada, who said the case by Dunzo’s invoice discounters “was not maintainable”.
That means the Tribunal found the case was not valid in legal terms.
This decision was finally given after it was delayed three times in one and a half months. Many people were waiting for this judgment because Dunzo has been facing several similar cases.
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Other Insolvency Cases Against Dunzo
Dunzo has had money problems for a while now. Because of this, many companies have filed insolvency petitions saying Dunzo did not pay them on time. Here are some of those cases:
- Invoice Discounters: These were the parties involved in the latest case. They said Dunzo had paid only 50% of the money they were supposed to. However, they did not say exactly how much Dunzo still owes them.
- Velvin Packaging Solutions: This is a company that makes eco-friendly packaging. They filed a case against Dunzo in November 2023. The NCLT had sent a notice to Dunzo after receiving their petition.
- Betterplace Safety Solutions: This company helps with background checks, hiring delivery people, managing equipment, and providing merchandise. They filed a case in February 2024, saying that Dunzo owed them Rs 4 crore.
Tribunal’s Criticism of Dunzo
The NCLT has earlier shown disappointment in Dunzo for not replying on time to these cases. In September 2024, the Tribunal said Dunzo had not filed its reply, even though they had asked for more time. Because of this, Dunzo lost its right to file a reply.
Dunzo’s lawyers asked for more time again, saying that they were talking to creditors for a settlement.
But the Tribunal clearly said “any settlement should be initiated by the other side” and that a “joint affidavit [must be filed] within two days”.
Dunzo’s Financial Problems
Dunzo has been having serious money troubles. The company is going through a liquidity crisis, meaning it doesn’t have enough cash to pay its expenses. This has caused many problems like:
- Delays in salary payments
- Late payments to vendors
- Laying off employees
In the financial year 2023, Dunzo reported a huge loss of Rs 1,801.8 crore.
Many vendors have also sent Dunzo legal notices asking for their money. These vendors include Google India, Facebook India, Cupshup, Koo, and Glance. Altogether, Dunzo reportedly owes them about Rs 11.4 crore.
Legal Representation
In this recent case, the invoice discounters were represented by Ayathan Associates.
On the other side, Dunzo was represented by Advocates Kumar Anuragh Singh and Zain Khan.
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