NCLT admits Piramal Capital’s insolvency plea in Rs 1,065-cr default by developer
Piramal Capital & Housing Finance’s plea to initiate a corporate insolvency resolution process against Edweena Real Estate after the company defaulted on its dues of more than Rs 1,065 crore.
The Mumbai bench of the National Company Law Tribunal has also appointed Jayesh Natvarlal Sanghrajka as the resolution professional for the company.
The total default includes the principal amount of Rs 499 crore and the outstanding interest thereon as of March 2023 of over Rs 395 crore, along with default interest and additional interest of more than Rs 169 crore.
In May 2016, original lender Dewan Housing Finance Corporation (DHFL) sanctioned a loan worth Rs 500 crore to Edweena Real Estate. Of this, Rs 499 crore was disbursed by the financial creditor to date in multiple tranches.
The said loan was secured by various securities and instruments, such as a deed of hypothecation of receivables and demand promissory note, a deed of simple mortgage, and an escrow agreement.
As per the loan agreement, any default in payment of interest or principal for two consecutive months would be construed as an event of default, and the entire loan would be due and payable.
And with this, the lender, DHFL, can enforce the security creditor in its favour upon one or more such defaults.
The developer committed its first event of default under the loan agreement in March 2019. Thereafter, the borrower committed various other events of default under the said loan agreement, said the petition.
Despite notices, the corporate debtor failed to repay outstanding amounts, leading to Piramal Capital & Housing Finance's petition to initiate an insolvency resolution process against the developer.
