MUMBAI: The National Company Law Appellate Tribunal (NCLAT) has dismissed a plea challenging initiation of insolvency proceedings against realty developer RNA Corporation. The National Company Law Tribunal (NCLT) had in December passed an order to start insolvency proceedings against the Mumbai-based developer after admitting a plea by Bank of India (BoI) over term loan default.
The bank had filed the petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, which sought the resolution process claiming total dues worth Rs 80.73 crore.
Anubhav Agarwal, managing director of RNA Corp, moved NCLAT challenging the NCLT order on the ground of limitation, stating that BoI has already moved the second application under Section 7 of the IBC for the same set of claims against another guarantor, Chamber Constructions, and is, therefore, not maintainable. The court has found no merit in this appeal.
BoI had granted a loan of Rs 75 crore to RNA Corp in October 2013 and the builder had defaulted on repayment of this loan in December 2014. Since then, the account has been classified as a nonperforming asset, the petition had said.
The developer had then argued that the company was regular in making payments to the bank, but due to the death of its chairman Anil Kumar Aggarwal and also because of the slump in the real estate market, the business was affected.
The company also submitted, through a letter in late-2015, that it had proposed to repay the credit facilities in instalments, and accordingly, payments of Rs 7.50 crore were made in instalments.
The Mumbai bench of NCLT admitted insolvency proceedings against RNA Corp and named Debashis Nanda as interim resolution professional to oversee the process.
SOURCE: The Economic Times, February 11, 2020.