NCLT admits Mantri Developers for insolvency
National Company Law Tribunal (NCLT) in Bengaluru has entered Mantri Developers Pvt. Ltd. in response to a complaint by Indiabulls Housing Finance Ltd., a real estate company situated in Bengaluru, into insolvency proceedings. Mantri Developers, according to the firm, were in default on payments totaling more than $6.2 million, including principal and interest. Mantri Developers had received $7.7 million of the $7.8 million loan that Indiabulls had previously approved for them. Up till the time of print, Mantri Developers had not responded to an email shared by ET. Via its attorney, Mantri Developers had stated that Indiabulls Housing Finance’s loan disbursement delays had negatively impacted project schedules and harmed cash flow.
NewsOTG gathered that the developer further asserted that Mantri Developers’ promoter Sushil Mantri and Mantri Castles Pvt. Ltd., who served as co-borrowers, had received loans from the financial creditor in addition to Mantri Developers. Nevertheless, the co-borrowers were not named in the lender’s insolvency filing; only Mantri Developers were. Mantri Developers also alleged that Indiabulls Housing Finance violated the arbitration clause in the parties loan agreement by submitting the case to the tribunal early. The lender responded by saying there was no “conflict” over Mantri Developers’ failure to pay past-due amounts and that the developer’s offer of a settlement amounted to an acknowledgment of responsibility, therefore there was no “dispute” for arbitration.
The NCLT sided with the lender and pointed out that Section 238 of the Insolvency & Bankruptcy Code (IBC) supersedes the Arbitration and Conciliation Act of 1996. As of the end of September, 6,199 companies had been admitted under the Corporate Insolvency Resolution Process (CIRP), with 21% of these companies being in the real estate industry, according to the most recent data from the Insolvency & Bankruptcy Board of India (IBBI). Rajesh Landmark Projects, Marvel Realtors & Developers, and Satra Properties are a few recent additions to the list of real estate companies. The real estate sector continues to attract investment despite its difficulties.
Investors are eager to invest in businesses that are now going through bankruptcy administration due to loan defaults since there are tangible assets that may be used, such as land lots and incomplete buildings. The trend of buying bankrupt enterprises to finish their projects is growing as more established developers with good finances scour the real estate sector for opportunities through the bankruptcy process.