The bankruptcy court has ordered personal insolvency proceedings against Sanjay Chhabria, promoter of property company Radius Group. This is the first high-profile case to be admitted for personal insolvency since higher courts stayed earlier petitions, while a tribunal verdict is also pending in another case.
The Mumbai bench of the National Company Law Tribunal (NCLT) passed the order on a petition filed by Beacon Trusteeship.
Two Radius Group companies are already into NCLT. Radius Estate and Developers was admitted a year ago, wherein the Adani Group emerged the highest bidder. Separately, Radius Estate Projects Pvt Ltd is also in NCLT, with an appellate authority directing NCLT Mumbai to hear Piramal Group’s plea against allowing Radius to exit insolvency proceedings.
The Supreme Court had stayed personal insolvency proceedings against Anil Ambani in September 2020 after questions were raised about the law’s constitutional validity. State Bank of India (SBI) had filed a plea to initiate personal insolvency proceedings against Anil Ambani.
In the case of the Wadhavans, promoters of defaulting financier Dewan Housing Finance (DHFL), the adjudication authority is yet to pass an order on initiating personal insolvency proceedings following a report of the resolution professional.
A two-member Mumbai NCLT bench, comprising Judge H V Subbarao and Chandra Bhan Singh, passed an order under Section 100 of the Insolvency and Bankruptcy Code in the Radius case. Beacon Trusteeship Ltd has claimed Rs 97 crore in dues. The resolution professional has invited claims from other lenders for verification by June 28 and aims to close the resolution process by November 30 this year.
In case of individual insolvency, the debtors and creditors negotiate a repayment plan, which is implemented under the supervision of the resolution professional. The recovery would involve the sale of debtor assets or the implementation of a repayment plan.
Radius Estate and Developers have verified claims of Rs 2,724 crore from financial creditors, while Radius Estate Projects Pvt Ltd has verified Rs 2,628 crore of claims from financial creditors.
On March 1, the court-appointed resolution professional Prakul Thadi was directed to recommend whether to accept or reject the application filed by Beacon Trusteeship.
The two-member bench has directed the debtor – Chhabria – not to transfer, alienate, encumber, or dispose of his assets or legal rights. The bench also noted that the resolution professional had not requested instruction from the tribunal to initiate negotiation between the debtor and the creditor for a repayment plan.
