The Bombay High Court on Tuesday allowed the petitions filed by Ravikiran Aggarwal and his son Pujit Aggarwal, the promoters of realty firm Orbit Corporation by pronouncing them insolvent.
The promoters of the Mumbai-based and at one point a listed firm on the BSE, owed around Rs 1,400 crore to its lenders had approached the court to declare them as insolvent. The father-son duo had also sought the court’s approval to appoint an Official Assignee (OA) to take charge of their assets to pay the debt to their lenders.
On Monday, Justice SC Gupte, while allowing the petitions filed by Aggarwals, also ordered the appointment of OA for the properties of the father-son duo and ruled that “Official Assignee is directed to take steps in insolvency including the realisation of properties and making of investments.”
The promoters of Orbit Corp had said in their two separate petitions that their liabilities far exceeded their assets and it would be in the best interest of all the lenders to declare them insolvent so that OA can be appointed to liquidate their assets to pay off their debts.
One of the lenders of the company and Mumbai-based realty firm Vardhman Developers to whom the father-son duo owed about Rs.56 crores along with interest and penalties had objected to the insolvency petitions filed by the Aggarwals.
“The debtors (Aggarwals) have made various false statements and even sought to create fictitious liabilities,” argued the counsel for Vardhman Developers opposing the insolvency petitions filed by Ravikiran and Pujit. “The debtors have not made full and complete disclosure. The debtors are guilty of committing breach and wilful disobedience of various orders passed by this court and also of contempt,” it further argued.
As per the Bombay High Court order, the recovery certificates have been issued against the Aggarwals by the Debt Recovery Tribunal (DRT), Mumbai, under which sums of Rs.278 crore and Rs.106 crores with further interest are payable by them, respectively, to Life Insurance Corporation of India and LIC Housing Finance Ltd.
The claims of the consortium of State Bank of India and Union Bank of India, and of Axis Bank, for which SARFAESI proceedings have been issued, are to the tune of over Rs.135 crores and Rs.161 crores, respectively.
The Vardhman Developers case was among the various liabilities that the father-son duo cited in their petitions to file for insolvency.
For Aggarwals, once known to build premium and luxury houses largely in tony South and Central Mumbai, trouble started in 2016 when financial institution Capri Global Capital for cheating worth Rs 2.55 crore. Around that time, the city court had ordered the arrest of Pujit Aggarwal, then MD and CEO of Orbit Corp and later he had to be in detention for about 10 months.
Counsel Cherag Balsara along with the law firm Rajani Associates were representing Ravikiran and his son Pujit Aggarwal in the case. While Vardhman Developers was being represented by senior counsel Venkatesh Dhond and Kausar Banatwala in the case. LIC Housing Finance was represented by advocate Rakesh Singh and MV Kini Law Firm.
Source: Economic Times