The National Company Law Tribunal (NCLT) has issued a stern warning to hyperlocal delivery giant Dunzo, signaling the possibility of a moratorium if the startup fails to address a notice concerning unsettled dues amounting to INR 4 Cr. The legal tussle, initiated by Betterplace Safety Solutions, unfolds against the backdrop of financial struggles and mounting legal challenges for Dunzo.
Betterplace Safety Solutions lodged a complaint with the NCLT in Bengaluru, citing INR 4 Cr in unpaid dues by Dunzo. The judicial panel, consisting of Justice T Krishnavalli and technical member Manoj Kumar Dubey, issued a notice and scheduled a hearing for March 4.
During the hearing, the petitioner emphasized Dunzo’s indebtedness, substantial losses, and the startup’s unresponsive stance despite prior notices. Dunzo, acknowledging the debt, sought an extension, expressing concerns about potential asset depletion due to financial constraints.
Comparisons were drawn to the BYJU’S case, highlighting the severity of the situation. The tribunal, raising questions about opposition to preserving the status quo, allowed Dunzo a week to respond to the notice. The directive includes a stipulation that no third-party interests can be created during this period, maintaining the status quo on assets.
The next hearing on this matter is scheduled for April 1, as Dunzo faces mounting pressure to resolve its financial disputes.
Dunzo, founded in 2015 by Kabeer Biswas, Suri, Mukund Jha, and Ankur Aggarwal, has positioned itself as a crucial player connecting consumers with nearby stores for daily needs. However, its expansion into the quick commerce space with Dunzo Daily has contributed to a significant increase in cash burn.
This warning from NCLT comes in the wake of Velvin Packaging Solutions Private Limited’s insolvency plea, admitted against Dunzo. The quick commerce startup has been grappling with legal notices from vendors for outstanding dues, including prominent names like Google India, Nilenso, Clover Ventures, Facebook India Online Services Private Limited (FBI), Cupshup, Koo, and Glance, totaling around INR 11.4 Cr.
In the financial year 2022-23, Dunzo reported a staggering loss of INR 1,801 Cr, a substantial increase from INR 464 Cr in the previous fiscal year. Despite a notable surge in operating revenue to INR 226.6 Cr (317% growth) in FY23 from INR 54.3 Cr in FY22, total expenses surged by 286% to INR 2,054.4 Cr in FY23.*
