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NCLT Chennai Admits Insolvency Plea Filed By Wootu Nutrition Against Itself Under Section 10
The has admitted a voluntary insolvency petition filed by , a chain of diet and nutrition clinics based in Chennai, initiating the against the company under .
A Division Bench comprising Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam found that the company had defaulted on debts exceeding the statutory threshold and that the petition was complete in all respects, with no disqualifications under .
A Story of Pandemic Losses and Failed Revival
Wootu Nutrition, which operates specialized clinics offering personalized dietary guidance for weight management, PCOD, pregnancy nutrition, and lifestyle-related conditions, traced its financial collapse to the COVID-19 pandemic. The company suffered unprecedented revenue losses during lockdowns and, in a bid to recover, raised franchise investments to open new branches and bolster marketing. However, substantial payouts to franchises severely strained cash flow.
The situation worsened in when continuous heavy rainfall forced cancellation of consultations, causing a drastic revenue drop. The deficit months that followed cascaded into severe cash flow issues, leading to delayed salaries, overdue EMIs, unpaid rents, and eventual closure of branches. Despite injecting its own funds and attempting to restructure, the company lost investor confidence and could not service its debts.
As of , the company reported outstanding liabilities of ₹7.56 crore against assets valued at ₹1.62 crore .
No Opposition from Creditors
The tribunal had directed the company to serve notice on its major creditors. Only one creditor, Gayathri Kumar , appeared through counsel to object, but no application under was filed. , another creditor, filed a memo stating that the company had settled its dues through a in .
The company’s shareholders had approved the CIRP initiation through a on , followed by a board resolution on . The petition was supported by an affidavit affirming that no creditor had been omitted from the list of dues.
Precedents on Section 10 Admission
The tribunal relied heavily on the ’s ruling in , which held that if a Section 10 application is complete and the corporate applicant is not ineligible under Section 11, the adjudicating authority is bound to admit it. The bench also cited the case, where it was observed that hearing every creditor at the pre-admission stage can cause inordinate delay and defeat the objective of .
The bench noted:
“This Tribunal is satisfied that there is a in the repayment of debt which is more than the threshold of Rs. 1.0 Crore and the petition filed under Section 10 is complete with all the necessary information. Further, the Corporate Applicant is not ineligible to make petition as per Section 11 of IBC, 2016. Therefore, we are of the view that this Company petition is required to be admitted u/s 10 of the Code.”
CIRP Initiated, Imposed
With the admission of the petition, the tribunal appointed L.K. Sivaramakrishnan (Registration No. IBBI/IPA-001/IP-P00045/2017-2018/10119) as the . The powers of the board of directors stand suspended, and the management of the company now vests with the IRP.
A under has been imposed, prohibiting the institution or continuation of suits, transfer of assets, enforcement of security interests, and recovery of property. The IRP is directed to make a within three days, call for claims, and take control of the company’s assets. The tribunal also directed the to provide complete access to books of accounts for the preceding eight financial years and to hand over all user IDs and passwords.
The company was directed to pay ₹3 lakh to the IRP to cover initial expenses. The registry was instructed to forward copies of the order to the company, the IBBI, and the .
