NCLT permits withdrawal of liquidation proceedings against Prag Distillery

Tilaknagar Industries Limited (TI), an Indian-Made Foreign Liquor (IMFL) producer, made an important announcement regarding their wholly-owned subsidiary, Prag Distillery Pvt. Ltd. (Prag Distillery), has successfully exited the liquidation process, thanks to an order from the National Company Law Tribunal (NCLT).

This order has also authorized the reinstatement of Prag Distillery's Board of Directors, who will now resume the management of operations.

Prag Distillery is situated in Andhra Pradesh and has a bottling capacity of approximately 6 lakhs cases per annum.

Tilaknagar Industries Ltd, renowned for producing the well-known Mansion House brand, had previously reached an agreement with Standard Chartered Bank, the financial creditor of Prag Distillery, to resolve all outstanding debts of the subsidiary.

Pursuant to the agreement, Tilaknagar Industries made a payment of USD 2,250,000 to Standard Chartered Bank on behalf of Prag Distillery.

Tilaknagar Industries further entered into a settlement agreement with DCB Bank Ltd., the sole remaining financial creditor of Prag Distillery, and cleared their outstanding debts completely.

Moreover, Tilaknagar Industries paid approximately Rs 14 crore to settle the claims of all operational creditors of Prag Distillery, even though only three of them had formally submitted their claims to the Liquidator.

Additionally, Tilaknagar Industries resolved all outstanding dues owed to the employees of Prag Distillery, ensuring continued employment for around 100 individuals.

As part of the settlement process, Standard Chartered Bank, with unanimous approval from stakeholders, approached the liquidator to withdraw the application filed against Prag Distillery.

Subsequently, the liquidator filed an application with the National Company Law Tribunal (NCLT) to officially withdraw Prag Distillery from the liquidation proceedings.

Exercising its discretionary authority, the NCLT issued an order declaring the conclusion of liquidation for Prag Distillery Pvt Ltd and enabling the reinstatement of the company's Board of Directors.