NCLT Approves Resolution Plan of Rs. 990 Crores for SARE Homes Unit

NCLT Approves Resolution Plan of Rs. 990 Crores for SARE Homes Unit

The National Company Law Tribunal (NCLT), Delhi has approved the resolution plan of Rs. 990 crores for a unit of SARE Homes. The plan was submitted by a consortium of KGK Realty and Dhoot Infrastructure.

The division member bench of Ramalingam Sudhakar (President) and Avinash K Srivastava (Technical Member) were hearing an application moved on behalf of Mr. Ajit Gyanchand Jain, Resolution Professional (RP/Applicant) of SARE Gurugram Private Limited., under the provisions of Sections 30(6) and 31(1)of the Insolvency and Bankruptcy Code, 2016 (IBC) read with regulation 39(4) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) for approval of the Resolution Plan in respect of SARE Gurugram Private Limited (Corporate Debtor).

A Company Petition was filed by Asset Care and Reconstruction Enterprises Limited (Financial Creditor) under Section 7 of the IBC for initiation of Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor which was admitted by the Adjudicating Authority vide its order dated 9 March, 2021.

Home owners and financiers had filed claims worth around Rs. 2100 crore when the company was admitted for bankruptcy. Financier’s claims were around Rs. 1000 crore. The home owners had filed claims of Rs. 1100 crore.

The Corporate Debtor is a company incorporated on 28 August, 2006 and claimed to be in the business of construction and development of residential and commercial real estate projects.

Further it was submitted that the Successful Resolution Applicant (SRA), a consortium comprising of KGK Realty and Dhoot Infra. KGK Realty was the ‘Lead Member’ of the KGK-Dhoot Consortium having 74% share in the KGK-Dhoot Consortium while Dhoot infra had 26% share.

The two-player consortium had submitted a debt resolution plan for SARE Gurugram Private Limited, that had defaulted on dues to creditors and was unable to complete construction of a promised township located on the outskirts of Delhi.

The consortium outbid five others bidders, including realty companies Alpha Corp and Signature Global and high net worth individual investors Nikhil Jain, Sunil Kumar Jain and Sumeet Nanda.

As per the present plan, the home buyers will get possession of their apartments within 36 months.

To protect the interest of the Homebuyers, the SRA proposed to allocate an initial sum of approximately Rs. 25 crores, i.e., the Cash Infusion Amount for the purpose of expediting the construction.

The total resolution plan size was stated to be Rs. 990,22,62,000.

The NCLT after considering the issue on the factual and legal aspects as was placed by the Resolution Professional and after perusing the record, observed that the Resolution Plan has been approved by the CoC with 100% of the members voting in favor of the Resolution Plan.

In this regard, the bench observed, “as per the resolution of the CoC, the Plan meets the requirement of being viable and feasible for the revival of the Corporate Debtor. By and large, there are provisions for making the Plan effective after approval by this Adjudicating Authority. On perusal of the documents on record, we are satisfied that the Resolution Plan is in accordance with Sections 30 and 31 of the IBC and also complies with regulations 38 and 39 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.”

Accordingly, the bench admitted the Resolution Plan.

Khaitan and Co.’s Partner Siddharth Srivastava acted as legal advisor to Resolution Professional and PWC acted as his financial adviser.