NCLAT lets RP Act on Nirmal Lifestyle arm case

The National Company Law Appellate Tribunal (NCLAT) has allowed the resolution professional to form a committee of creditors (CoC) of Nirmal Lifestyle (Kalyan) and proceed with the corporate insolvency resolution process (CIRP) against the company.

The tribunal said the CoC may take a call regarding finding out ways and means to complete the stalled projects of Nirmal Lifestyle (Kalyan). With the approval of the CoC, the resolution professional may take steps to obtain interim finances to complete the projects.

The court said it is also open for the CoC to take a decision to invite a resolution plan in a staggered manner, confined to project wise or building-wise, as may be feasible and convenient, so that unfinished projects may be completed and homebuyers are handed over the possession of their apartments without paying any additional cost.

“The period during which the constitution of CoC was stayed, i.e., July 12, 2022, to this date, is excluded from the period of CIRP,” said the NCLAT bench comprising chairperson Justice Ashok Bhushan and technical member Barun Mitra. The order was pronounced on Wednesday.

In June, the NCLT admitted the company, an affiliate of Mumbai-based developer Nirmal Lifestyle, under the CIRP on a plea by Srei Equipment Finance after the company defaulted on a loan of ₹84 crore.

In October 2021, the Reserve Bank of India superseded the board of Srei Equipment Finance and affiliate Srei Infrastructure Finance due to governance concerns and default; and initiated bankruptcy proceedings against them.

Following this, a suspended director of Nirmal Lifestyle (kalyan) appealed against the initiation of CIRP and the formation of a CoC. However, the NCLAT dismissed the plea and allowed process to go on.

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