Bira Faces Insolvency Plea As Devyani International Seeks Recovery Of Unpaid Dues
Bira Faces Insolvency Plea As Devyani International Seeks Recovery Of Unpaid Dues
The National Company Law Tribunal (NCLT) recently concluded hearings on an insolvency plea filed by Devyani International against B9 Beverages Limited (Bira) over alleged unpaid dues of ₹1.09 crore. The tribunal, comprising Judicial Member B. Venkat Balram Das and Technical Member Atul Chaturvedi, has scheduled the matter for compliance on March 7.
Devyani International, a publicly listed company operating Quick-Service Restaurant (QSR) chains such as KFC and Pizza Hut across India, initiated the proceedings after Bira allegedly failed to clear outstanding payments. The dispute dates back to October 1, 2021, when Bira partnered with Devyani International to expand its market presence. This collaboration led to multiple agreements, including a brand alliance agreement aimed at enhancing brand visibility and several supply agreements for product distribution at various locations, such as Ile Bar at Lucknow’s CCS Airport and Indira Gandhi International Airport, New Delhi. Additionally, Bira entered into supply agreements with Devyani’s sister concerns, Devyani Food Spirit Private Limited (DFSPL) and Devyani Airport Services Mumbai Private Limited (DASMPL), for supply at various airport locations.
An addendum to the brand alliance agreement and the supply agreement with DFSPL was signed on March 14, 2023. However, Devyani International claims that despite fulfilling its contractual obligations, Bira defaulted on payments, which were required to be made within 10 days of the end of each quarter. According to the plea, Bira began defaulting on payments from the first quarter of the 2023-2024 financial year, and invoices raised from June 29, 2023, onwards remained unpaid despite repeated reminders.
In response to the continued non-payment, Devyani issued a legal notice to Bira under Section 8 of the Insolvency and Bankruptcy Code (IBC), 2016. Bira’s reply, dated September 27, 2024, was dismissed as frivolous by Devyani, prompting the company to seek the initiation of Corporate Insolvency Resolution Proceedings (CIRP) against Bira. The case now awaits further proceedings before the NCLT.
