National Company Law Appellate Tribunal junks plea by GRK Reddy against insolvency proceedings


In July this year, insolvency proceedings were admitted against New Chennai Township Pvt. Ltd. for default in payment of dues worth over ₹400 crore

The National Company Law Appellate Tribunal (NCLAT), New Delhi has rejected a plea by G.R.K. Reddy against bankruptcy proceedings for New Chennai Township Pvt. Ltd.

In July 2019, the Special Bench of the National Company Law Tribunal (NCLT), Chennai, had admitted insolvency proceedings against New Chennai Township Pvt. Ltd. for default in payment of dues worth over ₹400 crore. The petition was filed by Phoenix ARC Pvt. Ltd. The company is behind Marg’s flagship project Swarnabhoomi, near Seekanakuppam. Against this order, Mr. Reddy had moved the NCLAT.

“It appears that since November, 2017, the company sought time to settle the matter before the Adjudicating Authority and now even after two years they have failed to do so. In such circumstances, we are not inclined to grant any relief,” the NCLAT said, in its order.

However, it said the order would not come in a way of efforts to Mr. Reddy to complete the project within the insolvency period of 180 days or settle the matter with all allottees and creditors, by taking advantage of Section 12A of insolvency and the bankruptcy code (IBC). Section 12A of the IBC gives a company another chance to make good on the default and retain control over the firm even after the case is admitted to the NCLT.

The company’s debt was assigned to Phoenix ARC Private Limited by Central Bank of India. In 2011 and 2012, the bank had sanctioned credit facilities aggregating to ₹193.29 crore.

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Printable version | Dec 6, 2019 8:18:52 AM |

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