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National Company Law Appellate Tribunal (NCLAT)NCLAT) on Thursday stayed the bankruptcy court’s order accepting the insolvency resolution petition against the listed real estate developer DB Realty,
An NCLAT bench of Justice Ashok Bhushan and Technical Member Barun Mitra posted the matter for further hearing on September 6.
DB Realty had approached the Appellate Tribunal to challenge the July 4 order of the National Company Law Tribunal accepting Bank of IndiaCorporate Insolvency Resolution Process (CIRP) petition against the company.
The detailed order of the appellate tribunal was not available at the time of writing the story.
“The company has to deposit ₹387 crore within 90 days as per its first one-time-settlement (OTS) offer (to Bank of India),” a person with knowledge of the matter told ET. “The company has offered full recovery of principal and interest at MCLR to the bank and the bank is currently considering the said proposal.”
Senior advocate Mukul Rohatgi, who appeared before the NCLAT for the promoters of DB Realty along with senior advocates Arun Kathpalia and Akash Agarwal of ABH Law, confirmed the development.
In an email reply to ET’s query, DB Realty said it believes it has a good case as the company is “not a debtor in this case”.
“However, the principal borrower, Pune Buildtech P has undertaken to pay the dues to the bank within 90 days, as per the proposal submitted by the bank.”
Bank of India declined to comment. Pune Buildtech is a subsidiary of DB Realty. An email query to Bank of India remained unanswered till press time on Thursday.
earlier this week, NCLT had accepted Bank of India’s plea to initiate insolvency resolution process against DB Realty and appointed Prashant Jain as its resolution professional.
The public sector bank had filed the application claiming default of ₹760 crore and interest thereon till September 30, 2022. The date of default was stated as August 30, 2015. The lender had sanctioned a term loan of ₹225 crore to Pune Buildtech in September 2013 for construction of residential towers in Yerwada area of Pune. DB Realty had extended a guarantee for the loan.
The company could not complete the project and stopped the construction work around September 2016 due to lack of funds. The bank, in its application, said the loan account was classified as non-performing asset (NPA) in December 2015 due to non-payment of interest since August 2015.
With no positive response to the notice issued to Pune Buildtech, the financial lender issued a legal notice invoking the guarantee in October 2022 and asked DB Realty to repay the total outstanding loan of over ₹760 crore.
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