NCLT Bengaluru initiates insolvency proceedings against Mantri Developers on Indiabulls application

The National Company Law Tribunal (NCLT) at Bengaluru last week initiated the corporate insolvency resolution process (CIRP) against Mantri Developers [M/s Indiabulls Housing Finance Limited v. M/s Mantri Developers Private Limited]..A coram of Justice (retd) T Krishnavalli and technical member Manoj Kumar Dubey admitted an application filed under Section 7 of the Insolvency and Bankruptcy Code (IBC) by Indiabulls Housing Finance, which claimed that Mantri defaulted on an amount of over ₹450 crore."In view of the facts and circumstances discussed above, the present Petition being complete and having established the default in payment of the financial debt and for the default amount being above Rs.1,00,00,000/- (Rupees One Crore Only), the Petition is admitted in respect of Respondent-Mantri Developers Private Limited under Section 7 of the I&B Code," the order read. .The application was filed against Mantri (the corporate debtor) on the allegation that it failed to comply with the loan agreement and make timely payments to Indiabulls on the specified due dates. Despite multiple notices, neither the debtor nor the co-borrowers made any payment of the outstanding amounts, the financial creditor Indiabulls contended. .On the other hand, Mantri contended that there was an inordinate delay on the creditor's part in disbursement of the loan amount, and therefore, their project timelines were severely affected and they also faced cash flow issues. Additionally, it was stated that the creditor was providing further financial facilities after filing of these proceedings and are by their own conduct admitting that the Mantri conglomerate was not in any financial distress.In fact, they submitted that though the creditor was discussing the possibility of a settlement and various settlement agreements were agreed between parties, none of them materialised. The proceedings were instituted only with a view to gain leverage in the settlement talks, it was further argued before the Tribunal..On examining the facts, he NCLT found that Mantri availed loan facilities from Indiabulls and defaulted in repayment, and thus, the first ingredient of debt was satisfied. Since default of payment was established and the amount of default was above ₹1 crore, the petition was admitted. .The Tribunal also appointed Ahsan Ahmad as the Interim Resolution Professional and directed the creditor to deposit ₹2 lakh with him to meet the expenses arising out of issuing public notice and inviting claims..Senior Advocate CK Nandakumar along with Advocates Prasanth VG and Lekha appeared for Indiabulls while Mantri was represented by Senior Advocate MS Shyam Sundar along with Advocates Krutika Raghavan, Sameeksha Patil and Mohnish Mohan..[Read Order]