NCLT Admits Insolvency Plea Against Neptune Ventures

NCLT Admits Insolvency Plea Against Neptune Ventures

The National Company Law Tribunal (NCLT), Mumbai Bench, has admitted a petition filed by Edelweiss Asset Reconstruction Company to initiate a corporate insolvency resolution process (CIRP) against real estate company Neptune Ventures & Developers.

The bench comprising of H.V. Subba Rao (Judicial Member) and Madhu Sinha (Technical Member) was of the view that the Petition was well within limitation and liable to be admitted and appointed Mr. Sandeep Mahajan as the interim resolution professional to carry out the functions as mentioned under the Insolvency and Bankruptcy Code, 2016.

The Edelweiss Asset Reconstruction Company Limited (Financial Creditor) invoked the provisions of Section 7 of Insolvency and Bankruptcy Code, 2016 (Code) read with rule 4 of Insolvency and Bankruptcy (Application to Adjudication Authority) Rules, 2016 for a Resolution of total Financial Debt of Rs. 4,01,98,02,238 against the Neptune Ventures and Developers Private Limited (Corporate Debtor).

The Corporate Debtor filed detailed affidavit in reply of Mr. Sachin Manohar Deshmukh, the Director of the Corporate Debtor opposing the admission of the above Company Petition solely on the ground of limitation.

The counsel appearing for the Financial Creditor strongly objected the argument of the counsel appearing for the Corporate Debtor contending that subsequent to the date of default, the loan facility was restructured on 20 September, 2016 for which the Corporate Debtor executed the necessary documents in favor of the Financial Creditor.

The Financial Creditor invited the attention of the NCLT to the board resolution of the Corporate Debtor dated 14 September, 2016 authorizing its Directors to execute necessary documents for restructuring. Since the Corporate Debtor had committed default the said restructuring arrangement was cancelled vide letter dated 3 May, 2019 by the Financial Creditor.

The Counsel also referred to the balance sheet of the Corporate Debtor as on 31 March, 2019 whereunder the Corporate Debtor had acknowledged the receipt of the loan from the Financial Creditor in a sum of Rs. 275,00,00,000 and also clearly mentioned about the restructuring of the loan and the said loan was declared as Non-performing Assets (NPA) by the original lender Central Bank of India.

He also invited the attention of the NCLT to the confirmation letter dated 4 September, 2020 executed by the Corporate Debtor confirming the outstanding liability at Rs. 3,58,36,56,903 as on 31 August, 2020.

Thus, he argued that all the above referred documents relied by the Financial Creditor would extend the period of limitation from 30 June, 2015 as per the law laid down by the Hon’ble Supreme Court in Dena Bank (Now Bank of Baroda) vs. C. Shivakumar Reddy and therefore, prayed for admission of the above Company Petition.

The NCLT hearing both sides and upon perusal of the above documents was in complete agreement with the submissions of the counsel appearing for the Financial Creditor.

The bench opined that there was no legal force in the above contention raised by the Corporate Debtor with regard to the plea of limitation and the above Company Petition was well within limitation and liable to be admitted.

Accordingly, allowed the (CIRP) order against Neptune Ventures and Developers Private Limited.