NCLT Admits Aviom India Housing Finance Into Insolvency Proceedings On RBI's Plea
NCLT Admits Aviom India Housing Finance Into Insolvency Proceedings On RBI's Plea
The National Company Law Tribunal (NCLT) has admitted Aviom India Housing Private Limited, a Non-Banking Financial Company (NBFC), into the Corporate Insolvency Resolution Process (CIRP) following a petition filed by the Reserve Bank of India (RBI). The decision was delivered by a Bench comprising Judicial Member Mahendra Khandelwal and Technical Member Dr. Sanjeev Ranjan, with a detailed order expected to be released soon.
Founded in 2016, Aviom India Housing Finance Pvt. Ltd. is a New Delhi-based housing finance company specializing in affordable housing loans for low-income households in semi-urban areas. Its product portfolio includes home improvement, renovation, and sanitation loans. As of March 31, 2024, the company reported an annual revenue of approximately $50.4 million and employed 284 people. Over the years, Aviom secured $51.6 million in funding from investors such as Nuveen, Sabre Partners India, and Gojo & Company.
The financial troubles at Aviom came to light in late 2024 when fraudulent transactions amounting to nearly ₹95 crores were discovered, severely affecting the company’s cash flow and its ability to meet repayment obligations. On January 30, the RBI moved the NCLT in New Delhi to initiate CIRP under Section 227 and clause (zk) of sub-section (2) of Section 239 of the Insolvency and Bankruptcy Code (IBC), along with the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 (FSP Insolvency Rules).
During the hearing on February 14, Senior Advocate Arun Kathpalia, representing the RBI, claimed that the central bank suspected financial mismanagement, with up to ₹1,000 crores allegedly missing from Aviom’s accounts. The RBI had already taken control of the company in January by superseding its board of directors, an action carried out under Section 45-IE(1) of the Reserve Bank of India Act, 1934, based on recommendations from the National Housing Bank (NHB). Ram Kumar, a former Chief General Manager of Punjab National Bank, was appointed as the Administrator under Section 45-IE(2) of the RBI Act.
Under Section 227 of the IBC, the RBI has the authority to initiate insolvency proceedings against NBFCs, provided they meet the specified criteria in consultation with the central government. The FSP Insolvency Rules establish a resolution framework for distressed NBFCs with an asset size of ₹500 crores or more. As the sectoral regulator, the RBI can intervene in cases of financial instability or governance lapses by replacing the board, appointing an administrator, and filing for insolvency proceedings before the NCLT.
