NCLT warns Viceroy Hotels’ resolution professional for not seeking fresh bids

Viceroy Hotels currently owns two properties in Hyderabad. At one of these, the Marriott group operates a five-star hotel.

The National Company Law Tribunal (NCLT) has warned the resolution professional of bankrupt Viceroy Hotels to face the consequences for not implementing its orders issued on June 9 to call for fresh bids of resolution.

Viceroy Hotels currently owns two properties in Hyderabad. At one of these, the Marriott group operates a five-star hotel, and at the other it operates a three-star outfit.

The Tribunal had in March 2018 admitted the petition filed by the financial creditor - the Asset Reconstruction Company, and ordered the commencement of the CIRP proceedings.

In all, Rs 714.24 crore of claims from financial creditors were admitted after the resolution professional constituted the CoC and invited bids from resolution applicants.

The Tribunal’s Hyderabad bench had on June 9 rejected the plan of the successful resolution applicant, Anirudh Agro Farms (AAFL), for Viceroy Hotels (VHL) following the expiry of bank guarantees furnished by AAFL.

Viewing liquidation of the corporate debtor as the last resort, the tribunal had directed the continuation of the corporate insolvency resolution process (CIRP) and asked the resolution professional to call for fresh bids.

In its latest order dated August 1, the NCLT bench comprising judicial member Venkata Ramakrishna Badarinath Nandula and technical member Charan Singh said the resolution professional, Govindarajula Venkata Narasimha Rao, was bound to implement the order of the Tribunal “in its letter and spirit, especially when the proceedings relating to corporate insolvency resolution are time bound.”

The resolution professional has contended that the Committee of Creditors (CoC) had resolved to prefer an appeal against the Tribunal’s order dated June 9 before the National Company Law Appellate Tribunal (NCLAT).

Responding to this, the Tribunal has made it clear that the mere filing of an Appeal does not operate as stay unless there is an interim order.

"Therefore, our order dated 09-06-2023 holds good and is fully enforceable, in the absence of any stay from the Appellate Authority," said the Tribunal in its latest orders on Tuesday.

Meanwhile, Hyderabad-headquartered construction firm Vasavi Realty Pvt Ltd has evinced interest to revive and resolve the insolvency of Viceroy Hotels at Rs 200 crore and filed an application before the Tribunal.

Making it clear that no further directions to call for fresh bids was required at the behest of Vasavi Realty Pvt Ltd, the Tribunal said, "However, the consequences of not implementing our order dated 09-06-2023 shall follow suit."