Syska LED Lights Placed Under CIRP Following NCLT Order Amid Claims of Unpaid Dues

The National Company Law Tribunal (NCLT), Mumbai Bench has ordered the initiation of a Corporate Insolvency Resolution Process (CIRP) against Syska LED Lights following a petition by its operational creditor, Sunstar Industries, which claimed unpaid dues of Rs 7.70 crore. The Mumbai Bench of NCLT rejected Syska’s claims of a pre-existing dispute, stating that email correspondence between the parties clearly established Syska's liability.

Sunstar Industries, a supplier of electrical home appliances, argued that Syska defaulted on 25 invoices between March 2023 and July 2023, despite acknowledging the debt through emails and post-dated cheques. Syska, part of the Pune-based SSK Group, contended there was a dispute over the quality of goods and accused Sunstar of misusing the Insolvency and Bankruptcy Code (IBC) as a recovery tool. However, the NCLT dismissed these arguments, noting that Syska’s one-time settlement (OTS) proposal was irrelevant to the issue of default and that Sunstar was entitled to file the petition under Section 9 of the IBC.

The two-member NCLT Bench further directed that Syska LED Lights be placed under moratorium as per the provisions of the IBC, suspending its board and appointing Debashis Nanda as the Interim Resolution Professional (IRP). The tribunal also ordered that the supply of essential goods and services to Syska should not be interrupted during the CIRP period and that suspended directors and employees must cooperate with the IRP.

This is not the first insolvency proceeding faced by Syska LED Lights; a previous CIRP petition by another creditor was withdrawn in May 2024 after a settlement. However, the company now finds itself again under the scrutiny of insolvency proceedings initiated by Sunstar Industries.