Zomato Wins Legal Dispute as NCLT Dismisses Insolvency Plea

According to multiple news reports, Zomato has won a legal battle that had been brewing with its former apparel supplier, Nona Lifestyle. The National Company Law Tribunal (NCLT) has dismissed an insolvency plea filed against Zomato. The dismissal btings much needed relief for Zomato.

The Zomato- Nona Lifestyle Dispute

The dispute relates to dues of ₹1.64 crore. Nona Lifestyle has claimed that it had supplied uniforms for Zomato’s delivery fleet, including jerseys for the ICC World Cup 2023 campaign, but wasn’t paid in full. The company also accused  Zomato has partially accepted some deliveries but later refused others. The reasons being storage space and campaign performance. Nona also said that  Zomato for asking for discounts and eventually backing out of payments altogether.

Zomato, on its part, reverted strongly. It categorically claimed that all accepted deliveries has been paid for, but penalized Nona for undue delays and subsequently adjusted the final amount accordingly, as per the terms in the contract. Zomato on it part firmly underscored that the issue was more about missed deadlines and not insolvency.

The legal battle, which I going for a while, and as per available information, it suggests that Nona’s earlier plea was dismissed last year due to its non-appearance, but it was later revived.

From the beginning its obvious this is a business issue of timelines and non -delivery and breach of contractual terms in terms of deliveries. With Nona not fully justifying its case, obviously lost it, as NCLT said it did not qualify under the Insolvency and Bankruptcy Code.