The National Company Law Tribunal (NCLT) has admitted a petition against Aviva Life Insurance Company to initiate insolvency proceedings against it. This is in response to an appeal at the tribunal by the Apeejay Trust, which says Aviva has failed to pay it licence fee and service tax charges for the premises occupied by Aviva, in Vashi (Navi Mumbai).
The dues work out to Rs 27.67 lakh. The case has been filed in NCLT Delhi since Avivaā€™s headquarters falls under its jurisdiction. A two-member bench comprising Justice R D Khare and Justice Sumita Purkayastha not only admitted Apeejayā€™s plea, but also appointed a resolution professional (RP) to take the insolvency proceedings ahead.
Aviva, according to the appeal made by Apeejay, has not paid it license fee, car parking, maintenance/service charge and service tax from 2017 onwards and this amount has added up to Rs 27.67 lakh. NCLT has brought the insurance company under protection from its lenders in line with Section 14 of the Insolvency and Bankruptcy Code.
Aviva, on its part, tried to take a legal stand with the NCLT that as an insurance company it cannot be proceeded against under the IBC Act, taking the plea that it is a financial services provider. NCLT did not accept this plea stating that the nature of debts in this case is not related to the insurance business of Aviva but are dues of service tax and licence fee. The Tribunal is very much within its rights to handle cases of corporate debts.
Aviva has had to put out a statement that the policies issues by it are not in any way affected by this issue and that the commercial dispute with its vendor will be handled by it through due process.
"The issue at hand is a commercial dispute with a vendor and Aviva reserves it rights & remedies in the court of law. Our customers policies are fully secure & we remain committed to growing our business and customers in India,ā€¯ the report quotes the company as saying.
Aviva is a joint venture between Dabur Invest Corp (Dabur group) and Aviva International Holding Ltd.