The National Company Law Tribunal, Hyderabad, has initiated corporate insolvency proceedings under the Insolvency and Bankruptcy Code, 2016, against Sankhya Infotech Limited.

The Bench of Madan Balachandra Gosavi, Member Judicial, and Veera Brahma Rao Arekapudi, Member Technical, while initiating insolvency proceedings, appointed Jagdees Kumar Morri as Interim Resolution Professional.

The proceedings were initiated by Pudhota Mahendra Kumar Choudhary, a financial creditor against the company, for default in payment.

The respondent company contended that the amount shown as defaults were remitted by the applicant towards the allotment of shares and that does not constitute debt. It also stated that it allotted shares towards the investments and that there is no debt, and therefore no default.

However, the NCLT said, “We are of the view that there is a financial debt which was due and not paid. Accordingly, the application has been admitted.”

While declaring a moratorium, the Bench prohibited the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of judgment and decrees.