The National Company Law Tribunal Forum (NCLT) has approved the plea filed by Indiabulls Housing Finance Ltd (IHFL) and has initiated insolvency proceedings against Mantri Developers, a real estate company based in Bengaluru.
Ahsan Ahmad has been appointed as the interim resolution professional for the company.
According to the order, the petition was admitted under Section 7 of the Insolvency and Bankruptcy Code, 2016, as the default in payment of the financial debt was established and the default amount was above Rs 1 crore.
The bench found the present petition to be complete and ordered the initiation of insolvency proceedings against Mantri Developers Private Limited.
The developer had defaulted on an Rs Rs 456.6 crore loan disbursed by IHFL and the petition was filed in February 2022.
"The present Petition has been filed IHFL with a prayer to initiate the Corporate Insolvency Resolution Process (CIRP) in respect of Mantri Developers for defaulting an amount of Rs.456.6 crores, as on January 1, 2023," the order dated March 28 said.
As per the details of the case, Indiabulls Housing Finance Ltd (IHFL) had sanctioned a total loan of Rs 574.2 crore to Mantri Developers under five different loan agreements. However, the company and its obligors failed to adhere to the loan agreements, leading to non-payment of dues.
The bench observed that IHFL had sent five notices to Mantri Developers dated December 2021 regarding each loan account. Additionally, in January 2022, five more notices were issued for each loan account.
Despite the notices, neither the company nor its co-borrowers made any payment towards the outstanding amounts to IHFL, as mentioned in the order.
The developer in defence claimed that a delay on the IHFL's part in the disbursement of the loan amount, the developer's project timelines were severely affected, and also faced cash flow issues.
Also, relying upon the assurances of IHFL, the developer introduced a marketing scheme that facilitated the customers to buy back with pre-EMI interest payments for their ‘Mantri Webcity’ Project in Bengaluru, the contention added.
The developer contended that the company is having sufficient assets and means to meet its debts, and thus it cannot be liquidated summarily merely at the instance of a frivolous creditor and the developer cannot be held liable for such debts.
"Since there is a clear indication of settlement, the discretion must be exercised to facilitate such settlement to
conclusively close the transactions between the parties," the order added.
However, NCLT rejected the contention as "not tenable under law."
The bench further added that out of the five sanctioned loan facilities, three loans were sanctioned not only to the developer but also to other co-borrowers, who are not a party to the petition and thus, it is not maintainable.
Even if the two loans to the developer (without any co-borrower) are considered, the amount is well above the threshold
requirement of Rs 1 crore.
Moreover, it also observed in response to the notices received under the Code, the developer vide letter dated January 16, 2022, stated that negotiations in respect of the OTS are underway, and the terms of the OTS (one-time settlement) are being captured under definitive agreements.
"It is noticed from the above reply that the developer has neither disputed the claim nor denied the agreements entered into between the parties," it said.
A list of questions has been sent to the developer and Moneycontrol will update the story after receiving a response.