NCLT approves Rs 343-crore resolution plan for Snehanjali and SB Developers
The National Company Law Tribunal (NCLT), Mumbai Bench-VI, has approved the Rs 343-crore resolution plan for Snehanjali and SB Developers Private Limited, which was undergoing insolvency proceedings. The resolution plan, submitted by La Mer Developers Pvt Ltd in consortium with Neel Builders and Developers, was approved by the Committee of Creditors (CoC) with an 83.46% voting share.
Resolution Plan Approval
Following the submission of Expressions of Interest (EoIs) and a competitive bidding process, four resolution plans were submitted. After thorough evaluation, the La Mer Developers and Neel Builders consortium emerged as the Successful Resolution Applicant (SRA). Their plan was approved by the CoC on October 10, 2024, following an e-voting process.
As per the plan:
- CIRP costs of Rs. 50 lakh will be settled within 60 days.
- Rs. 298.21 crore worth of homebuyers’ claims will be settled through delivery of flats.
- Rs. 22.67 crore in additional claims from homebuyers will be compensated through monetary settlements and added amenities.
- Rs. 19.59 crore will be paid to 280 re-settlers, covering rental compensation and corpus fund.
- Rs. 1.32 crore will be allocated for operational creditors (excluding government dues).
- Rs. 10.62 lakh will be paid towards government dues.
The plan also includes a performance bank guarantee of Rs. 5 crore, ensuring the effective execution of the plan. The consortium will arrange funding through a mix of equity infusion and construction finance, with Rs. 50 crore being infused initially and Rs. 30 crore to be raised from financial institutions.
Key Developments and Tribunal Order
- The tribunal reclassified homebuyers and re-settlers as secured financial creditors, ensuring prioritized claims settlement.
- Claims worth Rs. 52.3 crore by Hive Carbon Zero Developers Pvt Ltd, a related party, were admitted but not considered in the approved resolution plan.
- The tribunal directed the Implementation and Monitoring Committee (IMC) to oversee execution, with quarterly reports submitted to the NCLT.
- The moratorium under Section 14 of IBC ceased to be in effect from the approval date.
- The company’s Memorandum and Articles of Association will be amended to reflect the new ownership structure.
Project Completion Timeline
The redevelopment project ‘O2’, located in Chembur, Mumbai, is expected to be completed within six months, with a grace period of another six months. Flats will be handed over to homebuyers and re-settlers in a phased manner.
With this approval, Snehanjali and S.B. Developers Pvt Ltd moves towards revival under its new management. The decision marks a significant step for homebuyers and other stakeholders seeking resolution after years of project delays.
Background of Insolvency Proceedings
The Corporate Insolvency Resolution Process (CIRP) for Snehanjali and SB Developers Pvt Ltd was initiated following an application filed by Santosh Ananda Shetty and 66 other homebuyers, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The tribunal admitted the case on March 7, 2024, appointing Dinesh Kumar Deora as the Resolution Professional (RP).
The insolvency petition was challenged by Shekhar Vishwanathan, former director of the company, but was dismissed by the National Company Law Appellate Tribunal (NCLAT) on September 26, 2024.
Also See: NCLT Mumbai approves ₹44.5 crore resolution plan for Vidhant Realty
