Another Mumbai-based Developer To Be Wound Up, NCLT Orders Insolvency Proceedings

New Delhi: Yet another realty player of Mumbai will be would up for failing to repay loans taken from bank. Insolvency proceedings have been finally started against realty player RNA Corp, against which many consumers had filed cases in various courts, on a petition moved by Bank of India. The National Company Law Tribunal (NCLT) has ordered insolvency proceedings to be started against the builder under the Section 7 of the Insolvency and Bankruptcy (I&B) Code, 2016.

The court has appointed Debashis Nanda as the Interim Resolution Professional.  

According to the petition by Bank Of India, it had given a loan of Rs 75 crore to RNA Corp in October 2013. It was a term loan and the builder defaulted in repayment in December 2014. 

Bank of India arrived at a total dues of Rs 80.73 crore after including interest, penalties and legal expenses against the builder.

However, the builder argues in the court it was quite regular payments to Bank of India but because of the death of its chairman Anil Kumar Aggarwal, its business was affected. It was also affected due to slowdown in the real estate market.

RNA Corp also argued that through its letter in 2015, it had proposed to repay the loan in installments and accordingly, payments of Rs 7.50 crore were made by them in various installments. The last payment made by RNA to bank of India was on April 2016. 

The court said that RNA Corp owes money to Bank of India, a charge that RNA has not denied itself Bank of India.

“In the light of above facts and circumstances, the existence of debt and default is reasonably established by the Financial Creditor as a major constituent for admission of a petition under section 7 of the I&B Code. Therefore, the Application under sub-section (2) of Section 7 is taken as complete, accordingly this Bench hereby admits this Petition,” said the bench of NCLT comprising of members Bhaskara Pantula Mohan and V Nallasenapathy.

The Mumbai bench of NCLT said that the order of moratorium would be with effect from November 26 until the completion of corporate insolvency process.