New Delhi: Insolvency appellate tribunal NCLAT has upheld its order approving Aden Goodhomes' resolution plan for realty firm Radius Estate with a 93 per cent haircut to creditors.
A two-member bench headed by the NCLAT Chairperson dismissed the petitions of two dissenting financial creditors, saying it was the "commercial wisdom" of the Committee of Creditors (CoC) which approved the payments to various lenders.
The Mumbai bench of the National Company Law Tribunal (NCLT) on January 9, 2022, approved the resolution plan of Adani Goodhomes, a part of Adani Realty.
As per the resolution plan, which received 83.99 per cent votes of the CoC and was approved by the NCLT, around 700 flat owners were getting possession without any price increase.
The scheme was opposed by two dissenting financial lenders – Beacon Trustee and ICICI Prudential Venture Capital Fund Real Estate – before the National Company Law Appellate Tribunal (NCLAT).According to reports, Adani Goodhomes had proposed to pay around Rs 76 crore against the total claims of Rs 1,700 crore. However, it had assured completion of the construction of the project.
Dissenting financial creditors moved the NCLAT, calling it "unfair and inequitable" as it provides 93 per cent cut on their claims.
On the other hand, it offers 100 percent recovery to home buyers through the units allotted in the project, without any deduction or increase in price.
Rejecting this, NCLAT said, "It was the 'commercial wisdom' of the CoC to approve the payment to various creditors.,
It also rejected claims of violation of Section 30, sub-section (2) of the Insolvency and Bankruptcy Code (IBC).
Dissenting financial creditors had alleged that the liquidation value of Radius Estate's properties was grossly undervalued and that the valuation report suffered from material irregularities.
It was also alleged that other material irregularities were committed by the resolution professional in the entire process, which was rushed into approving the resolution plan submitted by Adani Goodhomes.
However, the NCLAT said, "It is relevant to notice that in the present case, the company has approved the resolution plan, which has directed the finance creditors to deduct and decide to hand over the units to the home buyers after the completion of construction." The cost was borne by SR (Adani Goodhomes).,
NCLAT further said that the dissenting financial creditors are entitled to receive payment as per the provision of IBC, which has already been offered.
“Thus, we are not inclined to interfere with the order of the adjudicating authority (NCLT) approving the resolution plan on the above grounds raised by the appellant,” it said.
The appellate tribunal further said that the NCLT in its order dated January 9, 2022 has taken into account all the relevant considerations on which the resolution plan has to be examined for compliance with the statutory provisions.
"Thus, we do not find any infirmity in the order of the Adjudicating Authority approving the resolution plan dated January 9, 2022," NCLAT said in its 59-page order.
The corporate insolvency resolution process (CIRP) against Radius Estate was initiated by NCLT on April 30, 2021, on a petition filed by Beacon Trustee Ltd.MIG (Bandra) Realtors and Builders was developing a project on land allotted to the Middle Income Group Cooperative Housing Society.
It had given the responsibility to Radius Estates and Developers to complete the construction of the project.
Radius had raised Rs 65 crore from Beacon Trusteeship through non-convertible debentures in 2018. However, due to some financial constraints the construction work could not proceed from March 2018.
The society canceled the agreement and the Beacon trusteeship went to NCLT.
A two-member bench headed by the NCLAT Chairperson dismissed the petitions of two dissenting financial creditors, saying it was the "commercial wisdom" of the Committee of Creditors (CoC) which approved the payments to various lenders.
The Mumbai bench of the National Company Law Tribunal (NCLT) on January 9, 2022, approved the resolution plan of Adani Goodhomes, a part of Adani Realty.
As per the resolution plan, which received 83.99 per cent votes of the CoC and was approved by the NCLT, around 700 flat owners were getting possession without any price increase.
The scheme was opposed by two dissenting financial lenders – Beacon Trustee and ICICI Prudential Venture Capital Fund Real Estate – before the National Company Law Appellate Tribunal (NCLAT).According to reports, Adani Goodhomes had proposed to pay around Rs 76 crore against the total claims of Rs 1,700 crore. However, it had assured completion of the construction of the project.
Dissenting financial creditors moved the NCLAT, calling it "unfair and inequitable" as it provides 93 per cent cut on their claims.
On the other hand, it offers 100 percent recovery to home buyers through the units allotted in the project, without any deduction or increase in price.
Rejecting this, NCLAT said, "It was the 'commercial wisdom' of the CoC to approve the payment to various creditors.,
It also rejected claims of violation of Section 30, sub-section (2) of the Insolvency and Bankruptcy Code (IBC).
Dissenting financial creditors had alleged that the liquidation value of Radius Estate's properties was grossly undervalued and that the valuation report suffered from material irregularities.
It was also alleged that other material irregularities were committed by the resolution professional in the entire process, which was rushed into approving the resolution plan submitted by Adani Goodhomes.
However, the NCLAT said, "It is relevant to notice that in the present case, the company has approved the resolution plan, which has directed the finance creditors to deduct and decide to hand over the units to the home buyers after the completion of construction." The cost was borne by SR (Adani Goodhomes).,
NCLAT further said that the dissenting financial creditors are entitled to receive payment as per the provision of IBC, which has already been offered.
“Thus, we are not inclined to interfere with the order of the adjudicating authority (NCLT) approving the resolution plan on the above grounds raised by the appellant,” it said.
The appellate tribunal further said that the NCLT in its order dated January 9, 2022 has taken into account all the relevant considerations on which the resolution plan has to be examined for compliance with the statutory provisions.
"Thus, we do not find any infirmity in the order of the Adjudicating Authority approving the resolution plan dated January 9, 2022," NCLAT said in its 59-page order.
The corporate insolvency resolution process (CIRP) against Radius Estate was initiated by NCLT on April 30, 2021, on a petition filed by Beacon Trustee Ltd.MIG (Bandra) Realtors and Builders was developing a project on land allotted to the Middle Income Group Cooperative Housing Society.
It had given the responsibility to Radius Estates and Developers to complete the construction of the project.
Radius had raised Rs 65 crore from Beacon Trusteeship through non-convertible debentures in 2018. However, due to some financial constraints the construction work could not proceed from March 2018.
The society canceled the agreement and the Beacon trusteeship went to NCLT.
