NEW DELHI: The National Company Law Tribunal (NCLT) Mumbai on Tuesday initiated corporate insolvency resolution process against Kasata Hometech under Section 7 of the Insolvency and Bankruptcy Code 2016. The court has appointed Jugraj Bedi as the interim resolution professional (IRP) for the case. The court directed the IRP to make public announcement. The financial creditor said that a debenture holders' representative agreement dated March 29, 2016 was entered into between Kasata Hometech India, Milestone Trusteeship Services and Karvy India Realty.
The petitioner subscribed to two sets of non-convertible Debentures (NCDs), issued under Tranche 1, Series 1 and Series 4. Under Tranche 1, Series 1, the petitioner subscribed to 30 NCDs, under Tranche 1, Series 4, the petitioner subscribed to 21 more NCDs. Hence the total debt due and payable to the petitioner is Rs 59.09 lakh.
The builder in its plea stated that it is financially sound and commercially solvent. It has an asset value of more than Rs 39 crore. It also has an inventory of finished and unfinished stock off more than Rs 80 crore. It further said that action in case of any default can only be initiated after a decision by the Majority Debenture Holders ("such number of Debenture Holders holding 75% of the nominal value of the then outstanding Debentures).
Kasata Hometech further stated that they have constructed and completed two out of three projects in or around the year 2018. However, due to overall depreciation in the market conditions of the real estate business, there was drastic reduction in the sale of the units in the projects. About Rs 17.52 crore is still receivable from the sold units.
NCLT-Mumbai however noted that under IBC the shift is from "inability to pay" to "existence of default." Also, the Majority Debenture Holders cannot be countenanced, because that would amount to defeating the provisions of the IBC. Until the hearing of the petition, the builder has not settled the outstanding dues. It clearly shows that they are in default of a debt due and payable. The buyer has been ordered to deposit Rs 1 lakh to the IRP to meet the expenses to perform his function within three days of the order.
The court has ordered a stay on all ongoing/pending suits or proceedings against Kasata Hometech. It has also prohibited the company from transferring, encumbering or disposing of its assets. Any foreclosure of company's assets or recovery of any property by an owner or lessor where such property is occupied by or in the possession of the company has also been prohibited. During the CIRP Period, the management of the builder shall vest in the IRP. The ex-management has been directed to provide all documents in their possession and furnish every information within a period of one week from the admission of the petition to the IRP.
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