NCLT dismisses insolvency plea against Township Developers, Real Estate News, ET RealEstate
The National Company Law Tribunal (NCLT) has dismissed an insolvency plea filed by Piramal Capital and Housing Finance on behalf of original lender Dewan Housing Finance Corporation (DHFL) against realty developer Township Developers India.
The financial creditor had filed the insolvency petition against the developer as guarantor for default in mortgage loans totalling over ₹5,855 crore. The Mumbai bench of the bankruptcy court has dismissed the petition citing technical limitations related to the timing of the application.
In the backdrop of COVID-19 outbreak and subsequent lockdown, on March 25, 2020, the government brought in Section 10A of Insolvency & Bankruptcy Code. This clarified that no application for initiation of corporate insolvency resolution process will be filed for any default arising on or after March 25, 2020, for six months or such period, not exceeding one year from such date.
According to the tribunal, the date of default needs to be calculated from the date of first invocation notice through which the corporate debtor was put to notice that the corporate guarantee has been invoked and called upon to pay the outstanding amount on behalf of the borrower.