Piramal Capital and Housing Finance drags Sunblink Real Estate to insolvency court

As we enter 2025, we bring you a list of companies against whom the corporate insolvency resolution process started. The top pick for us is Sunblink Real Estate, which has been dragged to the insolvency court by Piramal Capital & Housing Finance Ltd for defaulting on a loan of Rs 846 crore.

Case 1: Piramal Capital & Housing Finance Ltd. vs. Sunblink Real Estate Pvt. Ltd.

• Court: National Company Law Tribunal (NCLT), Mumbai Bench.
• Petitioner: Piramal Capital & Housing Finance Ltd. (Financial Creditor).
• Respondent: Sunblink Real Estate Pvt. Ltd. (Corporate Debtor).
• Issue: The Financial Creditor sought initiation of CIRP against the Corporate Debtor for defaulting on a loan of ₹2,186 crores sanctioned in 2019.
• Key Points:
  • The loan was disbursed to five subsidiary entities, which later amalgamated with the Corporate Debtor.
  • The Corporate Debtor defaulted on repayment, and the total outstanding debt as of 30.11.2023 was ₹845.81 crores.
  • The Financial Creditor issued recall notices in 2020 and a demand notice in 2024, but the Corporate Debtor failed to repay.
  • The Tribunal noted that the default occurred after the COVID-19 moratorium period (post-10A period) and that the debt exceeded the threshold limit of ₹1 crore.
  • The petition was admitted, and CIRP was initiated. An Interim Resolution Professional (IRP) was appointed, and a moratorium was declared under Section 14 of the Insolvency and Bankruptcy Code (IBC).

Case 2: Omkara Assets Reconstruction Pvt. Ltd. vs. Sanwariyaji Business Ventures Pvt. Ltd.

• Court: National Company Law Tribunal (NCLT), Jaipur Bench.
• Petitioner: Omkara Assets Reconstruction Pvt. Ltd. (Financial Creditor).
• Respondent: Sanwariyaji Business Ventures Pvt. Ltd. (Corporate Debtor).
• Issue: The Financial Creditor sought initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for defaulting on a loan of ₹12 crores sanctioned by Dewan Housing Finance Corporation Limited (DHFL) in 2014.
• Key Points:
  • The loan was declared a Non-Performing Asset (NPA) on 06.12.2016.
  • DHFL initiated CIRP in 2019, and the loan was later assigned to the Petitioner in 2023.
  • The Corporate Debtor defaulted on repayment, and the total debt as of 31.08.2024 was ₹50.34 crores.
  • The Corporate Debtor argued that the petition was time-barred, as the default occurred in 2016, and the limitation period expired in 2019.
  • The Tribunal ruled that the period of moratorium during DHFL’s CIRP (03.12.2019–07.06.2021) and the COVID-19 exclusion period (15.03.2020–28.02.2022) should be excluded from the limitation period.
  • The petition was filed within the extended limitation period and was admitted. CIRP was initiated, and an Interim Resolution Professional (IRP) was appointed.

Case 3: Omkara Assets Reconstruction Pvt. Ltd. vs. Shrinathji Business Ventures Pvt. Ltd.

• Court: National Company Law Tribunal (NCLT), Jaipur Bench.
• Petitioner: Omkara Assets Reconstruction Pvt. Ltd. (Financial Creditor).
• Respondent: Shrinathji Business Ventures Pvt. Ltd. (Corporate Debtor).
• Issue: The Financial Creditor sought initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for defaulting on a loan of ₹11 crores sanctioned by Dewan Housing Finance Corporation Limited (DHFL) in 2014.
• Key Points:
  • The loan was declared a Non-Performing Asset (NPA) on 06.12.2016.
  • DHFL initiated CIRP in 2019, and the loan was later assigned to the Petitioner in 2023.
  • The Corporate Debtor defaulted on repayment, and the total debt as of 31.08.2024 was ₹44.63 crores.
  • The Corporate Debtor argued that the petition was time-barred, as the default occurred in 2016, and the limitation period expired in 2019.
  • The Tribunal ruled that the period of moratorium during DHFL’s CIRP (03.12.2019–07.06.2021) and the COVID-19 exclusion period (15.03.2020–28.02.2022) should be excluded from the limitation period.
  • The petition was filed within the extended limitation period and was admitted. CIRP was initiated, and an Interim Resolution Professional (IRP) was appointed.

Key Legal Issues:

1. Limitation Period: The Corporate Debtor contended that the petition was time-barred as the default occurred in 2016, and the limitation period expired in 2019. However, the Tribunal excluded the period of moratorium during DHFL’s CIRP and the COVID-19 exclusion period, extending the limitation period.
2. Assignment of Debt: The loan was assigned to the Petitioner after the limitation period had expired, but the Tribunal held that the assignment did not revive the time-barred debt. However, the exclusion of the moratorium and COVID-19 periods allowed the petition to be filed within the extended limitation period.
3. Admission of CIRP: The Tribunal admitted the petition, finding that the debt and default were adequately demonstrated, and the debt exceeded the threshold limit of ₹1 crore.

Outcome:

• The petition was admitted, and CIRP was initiated against the Corporate Debtor.
• Mr. Vikas Gopichand Khiyani was appointed as the Interim Resolution Professional (IRP).
• A moratorium under Section 14 of the Insolvency and Bankruptcy Code (IBC) was declared.

Also see: NCLT approves Mangalam Multiplex resolution plan for Varutha Developers