The National Company Law Appellate Tribunal (NCLAT) on May 27 upheld the resolution plan proposed by Adani Goodhomes to take over bankrupt real estate company, Radius Estates [Beacon Trusteeship Ltd v. Jayesh Sanghrajka & Ors and connected petitions]
A coram of Chairperson Justice Ashok Bhushan and technical member Barun Mitra rejected the challenge raised by creditors and debenture holders including ICICI Prudential Venture Capital Fund.
Radius was admitted to insolvency on April 30, 2021 by the National Company Law Tribunal (NCLT) in Mumbai after it failed to handover flats to the homebuyers.
A committee of creditors (CoC) was constituted which included home buyers, Adani, creditors like HDFC Ltd, ICICI Prudential and Beacon Trusteeship etc.
The CoC approved the resolution plan proposed by Adani and when it was placed before the NCLT Mumbai for approval, few creditors including ICICI and Beacon objected to the plan.
NCLT Mumbai approved the resolution plan and rejected the objections raised by the dissenting creditors.
Two of the creditors challenged the same before the NCLAT.
They alleged that NCLT approved a resolution plan which was in contravention to the Insolvency and Bankruptcy Code (IBC).
They also contended that the resolution plan seemed to have hurriedly completed the insolvency process and Adani put a strict timeline for approval of the resolution plan to put pressure on the CoC.
The dissenting creditors also claimed that there were other material irregularities committed by the resolution professional in the entire process and the process was sped up to approve the resolution plan submitted by Adani.
The plan proposes to give flats to home buyers without them paying any escalation price while 93% haircut pay out is given to the financial creditors. The same is discriminatory, the creditors alleged.
The NCLAT found no hurry or procedural violation by the resolution professional in conducting the insolvency process and approving the resolution plan.
Thus, it proceeded to uphold the resolution plan and refused to interfere with the order of NCLT Mumbai.
Senior Advocates Krishnendu Datta and Abhijeet Sinha with advocates Sneha Jai Singh, Vaishnavi Rao, Divyam Sharma, Manan Shah and Akash Chatterjee appeared for Beacon.
Advocates Trishmpati Sen, Riddhi Sancheti, Ashish Parwani, Dikshat Mehra, Chintan Gandhi, Anurag Anand and Mukul Kulhari appeared for the resolution professional.
Senior Advocate Dhruv Mehta with advocates Denzil Arambhan, Pranaya Goyal, Dharav Shah, Amisha Patel, Dhawal Desai and Shubham Saini appeared for Adani.
Advocates R Sudhinder, Ranjit Shetty, Sandeep Singhi, Luckyraj Indorkar, Aastha Trivedi, Arjun Amin and Ekta Bhasin appeared for HDFC.
Advocates Rahul Kriplani, Suhasini Sen, Aditya Pratap Singh Chauhan, Kinnar Shah, Nitya Shah, Supraja V and Surbhi appeared for ICICI.
[Read order]