A creditor of beleaguered city-based realtor Mantri has approached the National Company Law Tribunal (NCLT) to start insolvency proceedings against the developer for its failure to develop a housing and commercial project in southern India.
Aayas Trade Services, an investee of Israel-based Elbit Plaza India Real Estate Holdings, has sent a demand notice to Mantri Developers under the Insolvency and Bankruptcy Code (IBC) and subsequently filed a petition for inordinate delay in the development of the project and default of payment obligations.
The petition said that “the corporate debtor has become financially insolvent, unable to honour its repayment commitments…” and is the reason for the application to be filed before the tribunal, said the copy of the petition that ET reviewed.
The notice alleged that Mantri received advances of over Rs 530 crore from Aayas/ Elbit for a real estate project in Bengaluru, but failed to perform its contractual obligations or return the money to Aayas / Elbit even after more than a decade. The money was raised between 2007 and 2010.
“It has been over a decade now and there is no seeing the light. Mantri had agreed to give an early exit to Elbit by entering into a revised agreement in 2010, but that wasn’t honoured either,” said a source at Aayas.
Elbit was expected to receive approximately Rs 276 crore in several tranches, pursuant to a negotiated, amended agreement.
Also, since Mantri failed to pay the money in the manner agreed and there were delays/defaults in making such payments, Mantri became immediately liable to pay around Rs 356 crore to the fund. This has led to multiple claims from Aayas and Elbit.
“Our client’s business transaction with Elbit is purely contractual and there is absolutely no component of debtor or debtee relationship in that. It is rather the said Elbit owes our client huge contractual obligations. It is ridiculous to place our client on the pedestal of “corporate debtor” if they have done so and they will face serious criminal and other legal action for the same. If they have approached NCLT or any other legal forum with any such stream of contentions, our client will deal with the same appropriately in a manner known to law,” said MS Shyamsundar, the advocate representing Mantri.
The application to NCLT has been submitted by Aayas Trade Services to initiate corporate insolvency resolution process against Mantri, the corporate debtor for its long-standing payment defaults as a last resort.
Separately on Wednesday, police in Delhi’s Indira Gandhi International Airport detained Snehal Mantri, director of Mantri Developers as she was attempting to fly to Singapore on Tuesday. Snehal is the wife of managing director Sushil Mantri.
Mantri Developers is being probed by Bengaluru police over an alleged cheating case among others. Between 2007 and 2010, Elbit entered into certain contracts with Mantri Developers with the intention of establishing a special purpose vehicle (SPV) for the development of a very large real estate project in Varthur Hobli, Bengaluru.
The SPV, Aayas Trade Services, was intended to develop approximately 440 acres of land for which Rs 530 crore was paid. “The commercial understanding was that Mantri Developers would aggregate the land and bring it into the SPV, but neither was the land aggregated nor was the money refunded,” said two people aware of the petition.
Source: Economic Times