EzeeGo, the operational creditor of Yatra, has settled its insolvency dispute with the Nasdaq-listed travel portal, drawing the curtains on their months-long legal tussle. The matter saw a resolution after the Supreme Court reportedly allowed EzeeGo to withdraw its insolvency application filed against Yatra. This comes a month after the former moved the SC against an NCLAT ruling that dismissed its appeal.
EzeeGo had approached the National Company Law Tribunal (NCLT) in March to initiate insolvency resolution against Yatra, citing dues of INR 3.5 Cr, which it claimed it was yet to receive from Yatra. Representing Yatra before the NCLT, senior advocate Krishnendu Dutta, sought the dismissal of EzeeGo’s plea, citing that the insolvency proceedings were barred under Section 10A of the IBC.
EzeeGo argued that INR 3.15 Cr was due from Yatra and specified October 30, 2020, as the date of default in the application. Yatra argued that EzeeGo’s date of default mentioned in the application came under the exempted period as per Section 10A. After much back and forth, NCLT dismissed Yatra’s plea and sided with EzeeGo on the matter. Subsequently, Yatra appealed the case before the appellate tribunal, NCLAT, which shot down EzeeGo’s submission and set aside the order of the Mumbai bench.
While there is no clarity on what prompted the out-of-court settlement, the withdrawal of the application comes as a sigh of relief for both EzeeGo and Yatra. Currently, EzeeGo is in the middle of insolvency proceedings after it defaulted on its term loans availed from Yes Bank back in 2019. The company is also the face of an FIR, which alleges that the platform defrauded the bank of more than INR 900 Cr. EzeeGo is also under investigation by the Enforcement Directorate (ED), and promoter Ajay Kerkar is under judicial custody for multiple charges of fraud and financial irregularities.
The settlement has come as a reprieve for Yatra, which is also looking to list on Indian bourses. A legal case could figure very prominently if Yatra decides to go ahead with the IPO plans and could also lead to challenges on the regulatory front, especially from SEBI.
