The National Company Law Appellate Tribunal (NCLAT) has dismissed a plea on the 11th of February, 2020. The plea had challenged the initiation of insolvency proceedings against developer RNA Corporation under Section 7 of the Insolvency and Bankruptcy Code (IBC) 2016. The plea sought the resolution process and further claimed dues of Rs. 80.73 crore. Furthermore, in December 2019, the National Company law tribunal (NCLT) had passed an order to start the insolvency proceedings against the Mumbai based developer after admitting a plea by Bank of India (BOI) over a loan default.
Anubhav Agarwal who is the managing director of the RNA Corp moved NCLAT and challenged the NCLT order on ground of limitation. He stated that the Bank of India has already moved the second application under Section 7 under the same set of claims against Guarantor - Chamber Constructions and is this not maintainable. The court did not find any merit in the appeal.
The bank in October 2013 had granted a loan of Rs. 75 crore to the RNA Corp to which the builder defaulted on the repayment of the loan due in December 2014. The account has been classified as a Non Performing Asset (NPA).
The arguments provided by the developer allege that the company was regular in making payments to the bank but has not been able to do because of the death of the company's chairman Anil Kumar Aggarwal and also the major slump the real estate market is facing. It is because of this the business was affected. The company further admitted that it had laid down a proposal in the late 2015 to repay the credit facilities through installments. The payment of amount Rs. 7.50 crore was made in installments.
The Mumbai bench of NCLT has admitted insolvency proceedings against RNA Corp and has appointed an interim resolution professional named Debashis Nanda to overlook through the process.
Author - Dyuti Pandya
