The Bombay bench of the bankruptcy court, the National Company Law Tribunal (NCLT), has admitted an insolvency resolution petition filed by the IDBI against event management company Wizcraft International Entertainment over default, reportedly of Rs. 60 crore-plus. The National Company Law Tribunal (NCLT) bench also earlier this month approved the name of Vinit Gangwal as the interim resolution professional for the Bombay-based company.
The Industrial Development Bank of India (IDBI) had loaned money to Great Indian Nautanki Company (GINC), a subsidiary of Wizcraft. GINC runs live entertainment show Kingdom Of Dreams in Gurgaon. Being the majority partner in GINC, Wizcraft had provided the IDBI a corporate guarantee to the loan. According to the IDBI, Wizcraft owed it Rs. 60.39 crore as on June 1, 2019.
According to Wizcraft’s counsel, the NCLT had no jurisdiction to entertain proceedings as liability of the corporate guarantor did not constitute financial debt. The counsels for the IDBI, however, argued that Wizcraft was trying to evade liability of obligations under the deed of guarantee. It was also argued on behalf of the IDBI that the corporate debtor had not disputed the liability under the deed of guarantee and also had not disputed the principal borrower’s (GINC) payment obligation and defaults under the loan agreements and other financial documents.
Wizcraft, which started operations in 1988, has emerged as one of the leading event management companies in India.
