The National Company Law Appellate Tribunal (NCLAT) has directed the Mumbai bench of bankruptcy courts to hear afresh the insolvency dispute involving realty developer Radius Group. Piramal Group, the biggest lender, wants bankruptcy proceedings against the property company.
It has also set aside an earlier NCLT order issued on March 28 that disallowed the withdrawal of Radius’ insolvency resolution process.
In March, the NCLT Mumbai bench had allowed an application filed by Piramal Capital & Housing Finance Ltd (PCHFL) that had opposed the withdrawal of the insolvency resolution against Mumbai-based real estate developer Radius Estate Projects.
In this case, Radius Estate Projects was admitted to the Corporate Insolvency Resolution Process (CIRP) on September 6, 2021, in a petition filed by SBICAP Trustee Company, on behalf of its debenture holders for default of over Rs 23 crore.
However, the company’s promoter, Anil Chhabria, had approached the NCLAT, seeking a stay on the constitution of the CoC, arguing that he was settling the matter with the debenture holders.
Later, on November 23, the appellate tribunal issued an order directing the promoter to settle the debts within 30 days. If that failed, the resolution professional was required to form the CoC in accordance with the law.
Following this, the resolution professional of the company filed an application for the withdrawal of the insolvency petition as the promoters have settled their dues with the debenture holders.
Opposing this withdrawal petition, Piramal Capital & Housing had argued that the developer owes over Rs 2,444 crore to its lenders while SBICAP Trustee supporting the withdrawal of the Corporate Insolvency Resolution Process (CIRP) initiated against the builder is having merely a claim of Rs 32 crore, which is meagre of 1.22% of the total admitted claims.
NCLT Mumbai bench, in March, had allowed Piramal Capital & Housing’s plea to not allow the withdrawal of insolvency process.
The developer’s promoter Anil Chhabria had filed a petition in NCLAT against this. On April 6, the NCLAT had stayed the formation of the CoC, in a plea filed by Chhabria to challenge the tribunal’s order.
Kumar Anurag Singh, advocate for Anil Chhabria argued at the appellate tribunal that in the present case Committee of Creditors (CoC) was not constituted. “Therefore, the rigor of voting share of 90% will not apply,” argued Singh.
According to the NCLAT, the appellant has vehemently argued that application filed before the constitution of the CoC has to be treated differently and the adjudicating authority is not supposed to sway with the amount involved which is to be recovered by various claimants who are already before the insolvency resolution professional (IRP).
Piramal Capital & Housing’s admitted claim is about Rs 1,573 crore. This loan was originated by DHFL and, following its recent acquisition, it has come under PCHFL’s portfolio.
