Insolvent art auction house Osian’s sold off for Rs 31 crore

The National Company Law Tribunal (NCLT), Mumbai Bench, has approved a resolution plan for Osian’s Connoisseurs of Art Pvt Ltd, a once-prominent Indian art and cultural institution, bringing closure to its three-year insolvency process. Entrepreneur Karan Pal Singh emerged as the successful resolution applicant, with his plan securing 100% approval from the Committee of Creditors (CoC). The order, dated April 7, 2025, marks a critical step in reviving the debt-ridden company.

Key Details of the Resolution Plan

• Financial Outlay: The plan entails a total payout of ₹31.19 crores, including ₹30.2 crores for stakeholders and ₹62 lakhs for insolvency costs. Secured financial creditors, led by IDBI Bank (52.39% voting share) and Axis Bank (47.61%), will receive 7.33% of their admitted claims (₹393.18 crores), while operational creditors, including employees and government dues, will recover between 0.19% to 11.06%.
• Payment Schedule: ₹10 crores will be paid upfront within 30 days, with the remainder staggered over 390 days.
• Management Overhaul: The new board will include Karan Pal Singh and his wife, Hemangini Singh, alongside a CEO and CFO. Existing share capital will be reduced to zero, and 60 lakh new shares will be issued, transferring 100% ownership to the Singhs.
• Litigation and Liabilities: Pending lawsuits, including defamation cases and tax disputes, will be addressed separately. Proceeds from clawback actions against preferential or fraudulent transactions (₹80.66 crores) will go to creditors.

Background: Osian’s Rise and Fall

Founded in the late 1990s by Neville Tuli, Osian’s revolutionized India’s art scene by blending auctions, curation, and a film archive. It amassed a prized collection of modern Indian art, rare cinema memorabilia, and Mughal-era artifacts. However, financial mismanagement, mounting debts (over ₹611 crores claimed by creditors), and legal disputes led to its collapse. The company entered insolvency in December 2021 after IDBI Bank initiated proceedings under the Insolvency and Bankruptcy Code (IBC).

Legal and Commercial Implications

The NCLT emphasized the commercial wisdom of creditors, citing Supreme Court precedents (K Sashidhar v. Indian Overseas Bank and Essar Steel case) that restrict judicial interference in CoC decisions. The tribunal also upheld extinguishing claims not included in the resolution plan, in line with the Ghanshyam Mishra judgment.

Stakeholder Impact

• Employees: Initially offered only ₹25 lakhs, gratuity dues were increased to ₹1.24 crores after tribunal intervention.
• Art Fund: Assets under the Osian’s Art Fund, a separate trust, remain untouched and will be managed per SEBI guidelines.
• Creditors: Banks face steep haircuts, but the plan avoids liquidation, which would have fetched just ₹15.82 crores (per valuation reports).

What’s Next?

A monitoring committee comprising lenders and the resolution professional will oversee implementation. Singh’s venture, Hunch Group, plans to revive Osian’s core art business while diversifying into hospitality and technology.

The approval underscores the IBC’s role in balancing creditor rights with corporate revival, even as stakeholders brace for minimal recoveries. For Osian’s, once a cultural titan, this marks a fragile new beginning.

Also See: NCLT approves Rs 318 cr Lulu International resolution plan for Manjeera Retail