The bankruptcy court has admitted Marvel Realtors & Developers Ltd under the corporate insolvency resolution process (CIRP) and appointed Manoj Kumar Mishra as the interim resolution professional for the Pune-based realty firm.
The Mumbai bench of the National Company Law Tribunal (NCLT) allowed the petition filed by the company’s lender IDFC First Bank to initiate the insolvency proceedings.
The lender had approached the bankruptcy court after the realty firm defaulted on its dues of over Rs 44.50 crore.
IDFC First Bank had sanctioned a term loan of Rs 48 crores in favour of Marvel Realtors & Developers at interest rate of 17.5% per annum in July 2017. As per the loan agreement, the debt was scheduled to be repaid in 48 monthly instalments and the principal amount was to be repaid in 10 instalments.
In August 2017, the lender disbursed Rs 44.51 crore of the total sanctioned amount. In November 2017, the real estate developer sought disbursement of additional Rs 30 lakh. By the end of December 2017, the company’s account turned irregular and interest payments were overdue.
In January 2018, the bank addressed a demand notice to the developer to pay an amount of Rs 2.04 crore, including penal interest, which was due and payable towards outstanding payment of interest.
As Marvel Realtors & Developers failed to make payment as per the agreement, IDFC First Bank, in 2018, filed a commercial suit before the Bombay High Court for the outstanding loan amounts. Following this, the company entered consent terms in May 2018 and accordingly the commercial suit was disposed of.
However, the company did not repay the defaulted amount under these consent terms despite notices served in October 2018 and March 2019. IDFC First Bank moved the bankruptcy court following this in December 2019.
During the pendency of this petition, the developer had approached the lender for settling the outstanding dues with the Financial Creditor. Accordingly, the lender and the developer executed a pact in February 2021 for paying settlement of Rs 35 crore and this was captured through consent terms in June 2021, following which the lender withdrew its petition. However, the dues are yet to be repaid.
“The application made by the Financial Creditor (IDFC First Bank) is complete in all respects as required by law. It clearly shows that the Corporate Debtor (Marvel Realtors) is in default of a debt due and payable, and the default is more than minimum amount stipulated under section 4(1) of the IBC,” said the NCLT Mumbai bench comprising of judicial member PN Deshmukh and technical member Shyam Babu Gautam.
According to the bench, the debt and default stands established and there is no reason to deny the admission of the lender’s petition.
As per the latest data from the Insolvency & Bankruptcy Board of India (IBBI), 5,893 companies were admitted under the CIRP till September-end this year. Of these, – 21% or 1,238 companies – admitted for insolvency were from the real estate sector.
Some of the major realty firms being admitted under the CIRP in recent times, include Rajesh Landmark Projects, Satra Properties, Vijay Group Realty and Kumar Urban Development among others.
