The National Company Law Tribunal (NCLT) has ordered initiation of corporate insolvency resolution process against real estate special purpose vehicle (SPV) Sankalp Siddhi Developers.
The SPV was promoted by Ahuja Hive, now known as Hive Carbon-Zero Developers, for the development of a project in Mumbai’s Jogeshwari suburb, and has been controlled and managed by Chinese group Fosun since 2022.
The company’s operational creditor, Lekha Enterprises, filed an insolvency petition following the default in its payments against services rendered under a work contract awarded by the company in June 2022.
Sankalp Siddhi Developers, in its reply to the petition, said it is an SPV promoted by Ahuja Hive (Hive Carbon-Zero Developers).
Hive Carbon-Zero Developers is incorporated and promoted by Gautam Ahuja, in which Agape Team Holdings has invested.
It has been stated that Ahuja was the CEO of Hive Carbon-Zero until January 2022, and it was discovered that Ahuja has committed fraud in respect of SPV by cheating multiple investors across India.
The contention of the company is that Ahuja abandoned the joint venture and the project, and due to this the company was stranded and continues to face various adversaries, commercially as well as monetarily. However, the operational creditor has a different take on this.
“The SPV was directly controlled by Chinese directors when it entered an express contract with the operational creditor and now, as an afterthought, it is trying to pass on the buck to Ahuja Builders,” argued Akash Rebello, counsel, and Chetan Kavdia, advocate and managing attorney of Secure Legal Mumbai, which is representing Lekha Enterprises.
The SPV, in its response, has sid that it has no malafide intention to wriggle out of its legal obligation, but it has been unable to pay the operational creditor. It was further submitted that the company is attempting to engage with third-party developers for the development of the project.
According to the NCLT’s Mumbai bench, the existence of debt and default—two essential qualifications required for admission of the insolvency plea—are proved in this case.
The SPV availed of the services of the operational creditor and the bills raised by the service provider were also acknowledged by the company through an email dated February 16, 2023, seeking more time to clear the dues. However, the company failed to make the payment of the outstanding dues, the bench observed while ordering initiation of insolvency.
The NCLT has appointed Rajkumar Jaiswal as interim resolution professional (IRP) to conduct the insolvency resolution process as per the Insolvency & Bankruptcy Code, 2016.
A total of 7,325 companies across sectors were brought into administration until December end, according to the latest data from IBBI. Of these companies admitted for resolution, 1,538, or 21%, have been from the real estate sector since the inception of the IBC in 2016.
Source: Economic Times