NCLT admits insolvency plea against Wizcraft

By LE Desk

Mumbai, May 24: The Mumbai bench of the bankruptcy court has admitted an insolvency resolution petition filed by IDBI Bank against entertainment and event management company Wizcraft International Entertainment over default claimed to be over Rs 60 crore.

The National Company Law Tribunal bench also earlier this month approved the name of Vinit Gangwal as the interim resolution professional for the Mumbai-based company.

IDBI Bank had given a loan to Great Indian Nautanki Company (GINC), a subsidiary of Wizcraft that runs India’s first live entertainment destination, Kingdom of Dreams, in Gurgaon. Wizcraft had provided a corporate guarantee to the loan. IDBI Bank has claimed that Wizcraft owed it Rs 60.39 crore as on June 1, 2019, The Economic Times reported.

Wizcraft argued the tribunal had no jurisdiction to entertain proceedings as liabilities of the corporate guarantor did not constitute financial debt. Counsels for IDBI Bank argued the company was trying to evade liability of obligations under the deed of guarantee.

“The corporate debtor has not disputed liability under deed of guarantee nor has disputed principal borrower’s payment obligation and defaults under loan agreements and other such financial documents,” argued lender.

The tribunal observed: “Under the terms of guarantee it is specifically agreed to as that the guarantee is of continuing in nature, the right to sue accrues as and when the guarantee was invoked and the date when corporate debtor failed to perform an obligation under the guarantee.”

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