Essel Group entities admitted under insolvency following Indiabulls complaint

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MUMBAI : Two Essel Group entities face bankruptcy proceedings for allegedly defaulting on repayments adding up to ₹520 crore. The National Company Law Tribunal on Thursday admitted Essel Homes Pvt. Ltd and Primcomm Media Distribution Ventures Ltd into insolvency for failing to repay ₹260 crore each.

Indiabulls Housing Finance Ltd, a financial creditor to both these entities, had moved an application initiating corporate insolvency resolution processes against the two Essel Group entities. “We are of the considered view that the financial creditor has proved existence of debt and default," said Justices Laxmi Gurung and Charanjeet Singh Gulati while admitting the companies into insolvency. The bench has appointed Ravi Prakash Ganti as the interim resolution or insolvency professional to oversee the operations of both the companies.

Counsel Nausher Kohli appeared for Indiabulls Housing, while Vinita Melvin represented Essel Homes and Primcomm. Indiabulls Housing in June 2020 agreed to sanction a loan of ₹190 crore to Gnex Realtech Pvt. Ltd (as borrower) and Essel Homes and Primmcomm (as co-borrowers.

However, these borrowers failed to pay the interest or the principal amount on the due dates, resulting in a default. In September 2021, the accounts were classified as non-performing assets, or bad loans. Essel Homes argued at the tribunal that Indiabulls had disbursed the loan to Gnex Realtech, and thus, under India’s Insolvency and Bankruptcy Code, it had no debt payable to the financial creditor.