NCLT orders liquidation of Ernakulam-based Greenlace Builders and Developers
In a significant development, the National Company Law Tribunal (NCLT), Kochi Bench, has ordered the liquidation of Greenlace Builders and Developers Private Limited, a real estate and construction company based in Kochi, Kerala. The decision came after the Committee of Creditors (CoC) voted in favor of liquidation, citing the company’s inability to continue operations and the absence of a viable resolution plan.
The tribunal, comprising Member (Judicial) Shri Jyoti Kumar Tripathi and Member (Technical) Shri Ravichandran Ramasamy, passed the order under Section 33(2) of the Insolvency and Bankruptcy Code (IBC), 2016. The CoC, led by Piramal Trusteeship Services Private Limited, which holds 89.31% of the voting rights, had resolved to liquidate the company during its 10th meeting held on January 7, 2024.
Background of the Case
The corporate insolvency resolution process (CIRP) against Greenlace Builders was initiated on February 16, 2024, following a petition filed by Piramal Trusteeship Services under Section 7 of the IBC. Mr. Sreenivasan P R was appointed as the Resolution Professional (RP) to oversee the process. During the CIRP, it was revealed that the company had ceased operations in the financial year 2022, had no cash flow, and was no longer a going concern.
The RP received claims totaling Rs. 8.74 crore from creditors, out of which Rs. 8.55 crore was admitted. Notably, Asten Realtors Private Limited, a subsidiary of Greenlace Builders with 98.6% shareholding, submitted a claim of Rs. 5.88 crore as a secured financial creditor. However, it was discovered that the suspended directors of Greenlace Builders had sold a secured asset, 81.92 Ares of land, for a mere Rs. 31.59 lakh, significantly undervaluing the property. The RP has filed an application seeking the cancellation of the sale deed, which is still pending before the tribunal.
Liquidation Order
The tribunal noted that the CoC, in its commercial wisdom, had decided to liquidate the company, and such decisions are non-justiciable as per the Supreme Court’s ruling in K. Sashidhar vs. Indian Overseas Bank & Ors. The tribunal found no reason to interfere with the CoC’s decision and ordered the liquidation of Greenlace Builders.
Mr. Sreenivasan P R, the current Resolution Professional, has been appointed as the Liquidator for the company. He has been directed to take custody of all assets, properties, and actionable claims of the corporate debtor and ensure their preservation and protection. The Liquidator will also be responsible for issuing public notices, filing the liquidation order with the Registrar of Companies, and submitting a preliminary report to the tribunal within 75 days.
Also See: NCLT Mumbai approves ₹44.5 crore resolution plan for Vidhant Realty
