Friday, May 7

NCLT admits Bank of India’s insolvency process against RNA Corp

MUMBAI: The National Company Law Tribunal (NCLT) has admitted Bank of India’s insolvency plea against realty developer RNA Corp. The bank had filed the petition under Section 7 of the Insolvency and Bankruptcy (I&B) Code, 2016, seeking the resolution process on the ground that the developer has defaulted on repayments of term loan.

The public sector lender had granted a loan of Rs 75 crore to RNA Corp in October 2013 and the builder defaulted on repayment of this loan in December 2014, since then the account has been classified as a non-performing asset, the petition said. The bank has claimed total dues worth Rs 80.73 crore including the principal loan, interest, penal interest and legal expenses.

The developer argued that the company was regular in making payments to the bank but due to the death of chairman Anil Kumar Aggarwal and also because of the slump in real estate market, their business was affected.

The company submitted that, through its letter late 2015, that it had proposed to repay the credit facilities in instalments and accordingly, payments of Rs 7.50 crore were made by them in instalments.

The Mumbai bench of NCLT, while admitting the insolvency proceedings against the company order, has kept it under moratorium with effect from November 26 till the completion of insolvency process. The bench has appointed Debashis Nanda as the interim resolution professional for the company’s resolution.

Separately, NCLT has initiated insolvency proceedings against AA Estates, a group company of realty developer RNA Corp and has asked homebuyers to submit their claims before December 11. Interestingly, the Mumbai bench of NCLT admitted and initiated the insolvency proceedings following the plea of a former employee of the company demanding the arrears of salary, leave encashment and bonus, with interest thereon.

An interim resolution professional (IRP) has also been appointed by the bankruptcy court to take over the management of AA Estates. This is one of the first cases of insolvency initiated on petition filed by an employee of the company.

The resolution process is estimated to be concluded by May 12, 180 days from the insolvency commencement date.

According to media reports, Anubhav Agarwal, managing director of RNA Corp was stopped from boarding a flight to Doha by immigration authorities at the Mumbai airport. The action was initiated on the basis of a lookout circular issued against him by the Mumbai Police’s Economic Offences Wing (EOW). The EOW has registered three cheating cases against him and the company on complaints regarding default on delivery of flats in the company’s project at Kalina in Santacruz suburb of Mumbai.

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